Bosch Russian factories can be bought by Chinese Hisense

As Kommersant found out, Chinese investors, including Midea and Hisense, are interested in acquiring Russian Bosch factories. One source claims that Hisense has already agreed on the purchase. In Bosch itself, however, they say that the negotiations have not yet been completed. Experts estimated the cost of enterprises at 3.8-4.4 billion rubles. In addition, investments in the modernization of production lines will be required.

The German Bosch is negotiating with a number of companies to sell its production of household appliances near St. Petersburg, a source in the government told Kommersant. He did not disclose the names of the contenders. A Kommersant source in the electronics market, who is familiar with the course of negotiations, claims that “the assets have already been acquired by the Chinese Hisense.”

According to the interlocutor of Kommersant, at the beginning of the year, Bosch “launched an internal tender” and determined the main circle of applicants, among which, in addition to Hisense, was, in particular, the Chinese Midea, as well as an unknown Turkish investor: “Midea did not make a worthy financial offer, Turkish the investor, on the contrary, offered a large amount, but Hisense won, developing joint projects with Bosch around the world.” In addition, Hisense has formulated “the most convenient buyback conditions if Bosch wants to return,” the Kommersant source clarified without revealing details.

BSH Household Appliances LLC clarified that the factories have not yet been sold and that the company is now “considering various options in accordance with the requirements of the law.” The company noted that they could not comment “until the final decision is made.” Hisense and Midea did not respond to inquiries.

Bosch has two home appliance factories in Russia, both in Strelna near St. Petersburg. At the end of August 2022, the company began looking for a buyer for its facilities due to production downtime, frozen amid the military conflict in Ukraine. Then the interlocutors estimated the value of assets at 3.8-4.4 billion rubles. (see Kommersant dated August 22).

Managing Director of Large Household Appliances, F+ tech | Marvel” Dmitry Levin doubts that Hisense paid the entire estimated amount: “Under the current conditions, departing non-residents from unfriendly countries are allowed to sell assets for no more than 50% of the real value, so the deal was probably closed for less than half the price.” He believes that buying and restarting the plant will cost Hisense much less than building from scratch.

Gleb Mishin, the head of the Candy-Hoover Group representative office in Russia, disagrees with this assessment. In his opinion, due to the fact that the equipment at these facilities was intended for the production of Bosch equipment, the new owners will need to either upgrade it or install a new one: “Both options require serious investments, so sometimes it’s easier to build a plant on your own.” According to Mr. Mishin, it will take at least six months to launch production and re-equip the sites near St. Petersburg.

With the advent of its own plant, the Chinese vendor has a chance to enter the top 5 in the categories “refrigerators” and “washing machines” in the Russian market, Dmitry Levin admits: “In China, Hisense ranks third in the list of largest manufacturers of household appliances.”

Timofey Kornev, Yulia Silence