Retail in Asia

In Markets

China’s Gome to buy USD1.45b retail unit from controlling shareholder

Chinese electronics and home-appliances retailer Gome said on Monday that it will spend HKD11.27 billion (USD1.45b) to acquire the entire issued capital of Artway Development Limited (Target Company), a company wholly-owned by the group’s controlling shareholder.

Under the deal, Gome will acquire a network of 578 stores across 181 Chinese cities, bringing the total number of its retail stores to 1,714. The newly-added stores are primarily located in fast-growing second and third-tier cities, which are highly complementary to the group’s existing retail store network.

Concurrently, the empowerment of the retail store network will accelerate the group’s e-commerce development, promoting full integration online and offline.

The acquisition will also enable Gome to upgrade its existing logistics network which covers 21 regional and 407 city distribution centers, by bringing together the listed and non-listed logistics arms.

The group is going to form a multi-dimensional logistics network with regional and city warehousing as well as national last-mile distribution coverage spanning more than 600 cities, 2,500 counties and 45,000 towns that can enjoy localized distribution and installation.

"The acquisition marks an important milestone in the history of Gome. As the retail store network of the Target Company and Gome are highly complementary, it is envisaged that the acquisition will further strengthen Gome’s total retail value chain and fuel its expansion in second and third-tier markets, and e-commerce development in particular," said Wang Junzhou, CEO of Gome.