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Best Buy completes Five Star purchase

BEST Buy announced yesterday that it has completed the acquisition of Jiangsu Five Star Appliance Co.

The largest consumer electronics retailer in North America said that it was to pay about US$185 million in cash to acquire the remaining 25 percent stake from Five Star minority shareholders before February 21.

Best Buy was granted a business license to convert Five Star into a wholly-owned foreign enterprise on February 6.

"Overseas retailers put high value on the Chinese market due to its comparatively faster business growth amid shrinking global consumption and China's consumer product retail market is still of low concentration," said Guo Yang, an analyst from Orient Securities Co.

Best Buy completed its plan to integrate Best Buy and Five Star in China ahead of schedule, the company said.

The retailer tapped into the Chinese market in 2003 and runs six stores in China, all in Shanghai, and will now gain access to 161 Five Star outlets, mainly in east China.

It said earlier it would scale down spending by 50 percent this year, which would involve a substantial reduction in new store openings in China after a sharp fall in net earnings.

The company bought a 75-percent stake in Five Star in 2006 for US$184 million and entered in an agreement to acquire the remainder in no more than four years.


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