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China's Haier Group, along with its partners Bain Capital LLC and Blackstone Group LP, dropped out of the three-way contest for No. 3 U.S. appliance maker Maytag after being outbid by rival Whirlpool.

Whirlpool's $1.35 billion cash-and-stock offer this week topped the $1.28 billion proposed on June 21 by Haier, China's largest refrigerator maker, and Maytag's agreement to sell to buyout firm Ripplewood Holdings LLC for $1.13 billion.

Buying Maytag [would] be too expensive for Qingdao-based Haier because the Chinese company would have to expend too much of its resources to compete in the U.S. market, said analyst Bruce Richardson at Evolution Securities China Co. in Shanghai. Maytag is losing market share to Whirlpool due to higher production costs and less appealing products, he said.

``There's a limit to what they want to pay for and there's a limit to how much they can absorb,' Richardson said.

Chinese companies, such as Haier and computer maker Lenovo Group Inc. are trying to acquire U.S. assets from the world's largest economy to feed demand from the world's fastest-growing major economy. They seek Western competitors for their expertise, brand names and access to markets, said Lu Yizhen of Citic- Prudential Fund Management Co. in Shanghai.

The Haier group indicated in a letter that pulled its offer to buy [Maytag] according to a statement issued by [them]. Haier didn't disclose why it withdrew.

http://www.bloomberg.com/apps/news?pid=10000103&sid=aRo.ObSDD56w&refer=us
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