GOME Electrical Appliances, China's largest electronics
retailer, has strengthened its dominance in key Chinese market
after taking over the management of its major rival Dazhong
Electrical Appliances.
GOME has lent a loan to a third party to buy the Beijing-based
rival which has annual sales of about 6 billion yuan, and takes
over its management. It will have an exclusive option to buy
Dazhong for not less than 3.65 billion yuan, He Yangqing, GOME's
spokesman told a press conference on Sunday. "We need time to get
the regulatory approvals, and there are uncertainties involved, so
we adopted this transition," said He, adding Dazhong hopes the
transaction will close as soon as possible.
After the deal, the Shanghai-Based GOME will have more than 100
stores in both Shanghai and Beijing. The stores will operate under
the two brands but funding, sourcing and logistics will merge,
according to He.
Dazhong is the fourth-largest appliance retail chain in China
after GOME, Suning Alliance Co and Jiangsu Five Star Appliance Co,
which is majority-owned by Best Buy, the largest US electronics
retailer.
GOME's arch rival Suning Appliance Co. withdrew from Dazhong's
acquisition competition after it announced on Thursday to halt the
talks with Dazhong for divergence on core merger terms.
(Xinhua News Agency December 17, 2007)
