Gome snaps up rival

China’s largest electrical appliance retailer Gome has bought rival Beijing Dahong Home Appliances.

Gome paid 3.83 billion yuan US$617 million for the chain, which it has effectively controlled for the last eight years since pumping loan finance into the business.

The vendor was Beijing Zhansheng Investment Co, with the payment a mixture of cash and debt forgiveness of a 3.6 billion yuan loan.

Gome said in a statement filed with the Hong Kong stock exchange that terms of the loan included an option to buy the business in the future. It had now decided to exercise that interest.

It is not yet clear if Gome will rebrand the stores it has acquired under its own branding or operate a dual brand strategy.

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