China's largest home appliance retailer, Gome Electrical Appliances, has acquired its smaller rival, Dazhong Electrical Appliances. Under the agreement, Gome will manage and operate the business of Dazhong and in return, receive management fees – an amount equivalent to the relevant net profits of Dazhong, less the amount of interest payable by the third party company for the loan.
Dazhong was founded by Mr. Zhang Dazhong in 1982. At present, it has around 100 electronic appliances stores nationwide, of which 61 stores are located in Beijing, accounting for about 50% market share in the Beijing consumer electronics market. Gome has 55 outlets in Beijing. After the acquisition, Gome will have more than 100 outlets in Beijing and Shanghai.