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Hong Kong : GOME Acquires Retail Network and Supply Chain Assets Held by Controlling Shareholder
Publish Date : 28-Jul-2015
GOME Electrical Appliances Holding Limited, a leading electrical appliances and consumer electronics retailer in China, today announced its proposed acquisition (the “Acquisitionâ€) of the entire issued capital of Artway Development Limited (the “Target Companyâ€), a company wholly-owned by the Group’s controlling shareholder. The total consideration for the acquisition stands at HK$11,268,000,000.
The acquisition move underscores the controlling shareholder’s commitment years earlier in undertaking quality asset injections, and confidence in the development of the Listed Company. Upon completion of the Acquisition, the Listed Company will successfully complete the nationwide deployment of its O2M “Total Retail†network and its supply value chain covering procurement, logistics and after-sales services, putting GOME’s “Total Retail†strategy in full gear to accelerate the realization of the “building another GOME†goal by 2017. The consideration will be satisfied in cash, new shares as well as warrants. These include HK$2.2 billion in cash, 6.2 billion new shares allotted and issued at a price of HK$1.39 per share, as well as warrants exercisable into 2.5 billion underlying shares at an initial exercise price of HK$2.15 per underlying share. The cash portion of the consideration will be funded from internal resources. The Acquisition is conditional on the Target Company and the controlling shareholder being granted the Whitewash Waiver and the approval from independent shareholders.
Create synergies to expand business on a national scale and accelerate penetration into fast growing regional markets, fortifying further GOME’s leading position in the industry GOME’s leadership in the electrical appliances and consumer electronic products retail market in the PRC will be strengthened further upon the Acquisition. With the injection of quality retail stores and creation of synergies in supply chain, GOME will take advantage of the growth potential offered by both the online and offline platforms to bring forth better total retail experience to consumers. The increase in economies of scale in supply chain and optimization of capital structure will create greater value and opportunities for shareholders. GOME also expects the acquisition to reap synergies from the integration and sharing of resources in retail sales operations, procurement, logistics, after-sales services, warehousing, information technology infrastructure and human resources. Other benefits include facilitating a more flexible fulfilment management, as well as cost savings in warehousing and distribution.
