Chinese electronics retailer Five Star Appliance, a majority owned subsidiary of U.S.-based Best Buy, has restructured its scope of operations by switching to a wholly foreign-owned company business license.
The cooperation between Five Star Appliance and Best Buy started in 2006. At that time, Best Buy invested USD184 million in acquiring a 75% stake in Jiangsu Five Star Appliance and promised to acquire the remaining 25% stake held by Jiangsu Five Star Appliance's minor shareholders within four years. Best Buy will now reportedly pay about USD185 million to formally acquire the 100% stake of Five Star Appliance no later than February 21, 2009.
After more than two years of waiting, 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 market. However, facing the global financial crisis, Best Buy's prospects in China are still unclear. Prior to this, as the company has announced plans to cut its costs in 2009 by about 50% and the number of its newly-opened stores in the United States, Canada, and China will also be greatly reduced.
