Pakistan Information & News

Gome Electrical Appliances Holding Ltd, the biggest home appliance retailer of China has sealed a deal to acquire its rival China Paradise Electronics Retail Ltd. In what is being called an improved deal, the latest offer consists of cash and share swap by Gome, the value of which is estimated to be more than USD 618 million. China Paradise will however maintain its own brand name.
Post-acquisition, Gome would be able to expand its presence in the affluent area around Shanghai, according to analysts. Gome would also get a network edge, which would give it a head start over several competitors, including foreign players, for years. Interestingly, the deal between Gome and China Paradise is expected to create a chain worth USD 10 billion in sales revenue on an annual basis and more than one-tenth of the market share.
Shanghai-based China Paradise, the nation’s third-biggest home appliance player, has over 60 per cent of the city’s market, says a report by UBS Securities Asia Ltd. It would however maintain its Yolo brand. Also, its merger agreement with Beijing Dazhong Electrical Appliances, the fifth-largest player in the sector, will remain effective. There are reports from local media that Gome will soon merge with two other Chinese electronics retailing giants, Yongle and Dazhong, and that the three companies have already reached a preliminary agreement on the issue. The amalgamation of these home appliance chain retailers will affect the structure of the current home appliance retailing industry in China. The merger will monopolize the home appliance market in the first-tier markets such as Beijing and Shanghai.

Read more at Banshi Talukdar

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