The U.S. electronics retailer Best Buy has published a report, which states Five Star Appliance, a Jiangsu-based Chinese electronics retailer, has now become a wholly foreign-owned company.
According to a prior agreement between the two parties, Best Buy will pay about USD185 million to formally acquire a 100% stake in Five Star Appliance by February 21, 2009. The cooperation between Five Star Appliance and Best Buy started in 2006. At that time Best Buy invested USD184 million to acquire a 75% share of Jiangsu Five Star Appliance and promised to acquire the remaining 25% stake held by Jiangsu Five Star Appliance's minor shareholders within four years.
After over two years, Best Buy will finally complete the acquisition of the remaining 25% stake in February 2009, which will accelerate the merger of Best Buy and Five Star Appliance in the Chinese electronics market.
However, due to the global financial crisis, Best Buy's view of the China market is still unclear. Prior to this, the company had announced plans to cut its costs in 2009 by about 50%, drastically reducing the number of stores in the United States, Canada, and China.