The Carlyle Group to acquire 9% stake in Haier Electronics Group

Beijing, China – Global alternative asset manager The Carlyle Group today agreed to invest US$137 million in Haier Electronics Group Co, Ltd. (HEG) through Convertible Bonds and has an option to invest an additional US$57 million when warrants are exercised. Together with other investments in the company, Carlyle will have a right to securities representing approximately 9% of the company. The transaction is subject to customary closing conditions and is expected to close in August. As a strategic investor, Carlyle Asia Partners III L.P. will have one out of nine directors on HEG’s board. The investment will support HEG’s efforts to expand its service and distribution capabilities, particularly among third-party product distributors, and tap the growth potential in China’s tier 3 and tier 4 markets. Publicly listed on The Stock Exchange of Hong Kong, HEG (01169.HK) is a subsidiary of Haier Group, an internationally known white goods brand. As one of China’s largest manufacturers of washing machines and water heaters, the HEG is transforming to a service-oriented company with a focus on distribution, logistics and after-sale service in the home appliance sector across China. It has an extensive distribution network in Tier 3 and 4 areas distributing both Haier and third party-branded home appliances and related products. Janine Feng, Managing Director of The Carlyle Group, said, “We are excited to partner with Haier Group. By working with HEG, we expect to help deliver home appliances of multiple brands to more families, boost China’s domestic consumption and improve people’s quality of life, particularly in the remote Western region and the vast countryside.” In its 12th Five-Year Plan (2011-2015) for social and economic development, China seeks to expand domestic consumption, develop the rural and Western areas, transform industrial structure, promote service industry and achieve balanced growth and development. “Carlyle is committed to investing in and growing together with China. Our investment in HEG complements China’s next phase of development. We will support HEG’s transformation to a service-oriented company that helps bridge the gap between the developed and underdeveloped markets,” Ms. Feng said. Zhou Yunjie, General Manager of HEG and Executive Vice President of Haier Group, said, “As a leader in white goods manufacturing and distribution, HEG enjoys an extensive distribution channel in Tier 3 and 4 areas. We are well positioned to capitalize on the growth opportunities presented by China’s development of rural and Western areas to achieve balanced and sustained social and economic growth. Carlyle has strong global resources, visions and industrial expertise. Strategic partnership with Carlyle will not only benefit our expansion in overseas markets, but also bring us advanced retail and distribution management know-how and rich investment and acquisition experience. We can jointly build a leading distribution network for multiple brands in China’s Tier 3 and 4 markets.” Carlyle has invested more than US$3 billion in equity in China. * * * * * About The Carlyle Group The Carlyle Group is a global alternative asset manager with $107.6 billion of assets under management committed to 84 funds as of March 31, 2011. Carlyle invests across three segments - corporate private equity, real assets and global market strategies ‐ in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,000 people in 20 countries. Web: www.carlyle.com  Video: www.youtube.com/OneCarlyle. About Haier and Haier Group A global leader in consumer electronics, Haier ranks #1 in Global Major Appliances Brand Market Share according to Euromonitor International in its Global Major Appliances Brands 2010 ranking by brand share (by global brand name), with a market share of approximately 6.1%. Established in 1984 in Qingdao, China, Haier employed more than 70,000 people around the world with 29 manufacturing bases, eight research centers and 19 overseas subsidiaries. Its revenues reached $20.7 billion (RMB135.7 billion) in 2010. Haier Group was one of the 50 Most Innovative Companies in 2010 as published by BusinessWeek.