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Suning agrees US$8.3m deal
By Ding Yining |
00:47 UTC+8 June 25, 2009
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Print Edition
Print Edition
SUNING Appliance Co yesterday said it is to buy a controlling stake in Japanese electrical retailer Laox Co as a part of its international development strategy.
China's second-largest home appliance retailer will buy 66.67 million new shares from Laox Co at 12 yen (13 US cents) per share in a private placement to become its biggest shareholder. The total transaction value is 57.3 million yuan (US$8.3 million).
Suning will hold 27.36 percent of Laox after the issuance of new shares and will hold two positions on the new board of directors.
The deal is still pending approval by Laox shareholders as well as government regulators, the company said.
"It will speed up Suning's development in the international market, and Suning can also learn from Laox's retailing experience to expand in China's market," Suning President Sun Weimin said.
"The investment size in Laox is suitable for Suning, and we think the investment risk is controllable," he said.
Suning will reshuffle the layout of the outlets of Laox in Japan within the next three years and is expected to help Laox into profit within 18 months.
Laox has been considering restructuring after reporting losses for nine consecutive years and had been in touch with Suning about a partnership since last year.
Suning plans to open more than 200 outlets annually on Chinese mainland within the next three to five years, giving it more stores than top retailer Gome Electrical Appliances Holdings.
China's second-largest home appliance retailer will buy 66.67 million new shares from Laox Co at 12 yen (13 US cents) per share in a private placement to become its biggest shareholder. The total transaction value is 57.3 million yuan (US$8.3 million).
Suning will hold 27.36 percent of Laox after the issuance of new shares and will hold two positions on the new board of directors.
The deal is still pending approval by Laox shareholders as well as government regulators, the company said.
"It will speed up Suning's development in the international market, and Suning can also learn from Laox's retailing experience to expand in China's market," Suning President Sun Weimin said.
"The investment size in Laox is suitable for Suning, and we think the investment risk is controllable," he said.
Suning will reshuffle the layout of the outlets of Laox in Japan within the next three years and is expected to help Laox into profit within 18 months.
Laox has been considering restructuring after reporting losses for nine consecutive years and had been in touch with Suning about a partnership since last year.
Suning plans to open more than 200 outlets annually on Chinese mainland within the next three to five years, giving it more stores than top retailer Gome Electrical Appliances Holdings.
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