Haier Smart Home secures unconditional clearance for Carrier Commercial Refrigeration acquisition under the new FSR regime

Compass Lexecon provided economic advice to Haier Smart Home (‘Haier’) during the foreign subsidy investigation by the European Commission regarding its acquisition of Carrier’s Commercial Refrigeration business. The transaction was unconditionally cleared in all concerned jurisdictions, including reviews under both the merger framework and the Foreign Subsidy Regulation (‘FSR’) regime.

Situation

In December 2023, Carrier Global Corporation (‘Carrier’), active in intelligent climate and energy solutions, announced the sale of its global commercial refrigeration business to Chinese company Haier. Haier is a global leader in consumer electronics and home appliances, already active in the household refrigerator business. The $775 million transaction would allow Haier to expand its activities into commercial refrigerators. As a non-EU company, acquirer Haier was required to notify the transaction to the European Commission under the new FSR regime, which enables the Commission to address distortions to competition caused by foreign subsidies.

Our Role

Compass Lexecon assisted Haier and its external legal counsel, Clifford Chance, with the FSR filings. Our economic analysis focused on whether the terms of the relevant loans were in line with market conditions and would not confer a benefit on Haier within the context of the FSR. We also assisted Haier in responding to the regulatory inquiries of the European Commission.

Outcome

We successfully helped Haier receive unconditional clearance from the European Commission. This landmark transaction marks the first merger filing by a Chinese company before the European Commission under the newly implemented FSR regime.

The team

The Compass Lexecon team was led by EMEA Co-Head Lorenzo Coppi, Executive Vice President Vanessa Yanhua Zhang, and Senior Vice President Alan Rozenberg, and included Vladimir Tsimaylo, Cecilia Li, Rita Li, Richard Zhao, Stephen Feith, Joseph Simpson, Mandy Liu, Amy Shi, and India Riordan.

The team assisted attorneys at Clifford Chance that included Yong Bai, Richard Blewett, Anastasios Tomtsis, Georgios Yannouchos, Katharine Missenden, Helga Gudmundsdottir, Maria Tsoukala, Jonathan Blondeel, Ilya Stekunov, Avani Joshi, Laura Zsarnai, Hanna Hänström Wawrzyniec Józefów, Dayu Man, and Nan Lan.