Wumei seals majority stake in B&Q China
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Beijing based supermarket chain Wumei Holdings will pay CNY1.4 billion (USD225 million) for a majority stake in home decorating chain B&Q China whose parent Kingfisher failed to spur growth in the home decoration market in the world’s second-largest economy.
The all-cash takeover will be subject to approval from China’s Ministry of Commerce, and is set to complete in the first half of 2015, Kingfisher said in a statement yesterday.
Xu Zhicheng, an analyst with Guotai Junan Securities, said Wumei could leverage its overall data management system and dealers’ network within the country to boost B&Q’s performance.
Questions & Answers
Q.What is the agreed price for Wumei to acquire a majority stake in B&Q China?
What is the agreed price for Wumei to acquire a majority stake in B&Q China?
Wumei Holdings will pay CNY1.4 billion, which equates to USD225 million, for the majority stake. This will be an all-cash takeover of the home decorating chain.
Q.Which regulatory body needs to approve the takeover before it can be finalised?
Which regulatory body needs to approve the takeover before it can be finalised?
The takeover is subject to approval from China’s Ministry of Commerce. Kingfisher stated that the transaction is expected to be completed in the first half of 2015, pending this regulatory consent.
Q.How might Wumei improve B&Q China's performance after the acquisition?
How might Wumei improve B&Q China's performance after the acquisition?
Analyst Xu Zhicheng suggests Wumei could use its existing overall data management system and its network of dealers across China. This strategy aims to boost B&Q’s performance within the market.
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