Feb. 27 (Bloomberg) -- GD Midea Electric Appliances Co., China's largest publicly traded maker of household goods, bought a 24 percent stake in Wuxi Little Swan Co. to become the washing-machine maker's biggest shareholder.
Midea paid 1.68 billion yuan ($235 million) for 87.7 million Little Swan shares, raising its stake to 29 percent, it said in a Shenzhen Stock Exchange statement today. The stock was bought from Guolian Group.
Foshan, Guangdong-based Midea plans to expand as higher wages and China's surging real-estate market boosts demand for refrigerators, washing machines and air conditioners. Retail sales in China, the world's fastest-growing major economy, rose 17 percent last year.
Midea bought the stake at an average price of 19.16 yuan a share, according to Bloomberg calculations. That's a 13 percent discount to Shenzhen-listed Little Swan's 21.90 yuan closing price on Jan. 11. The stock has been suspended since then.
Midea, whose 2007 net income more than doubled to 1.2 billion yuan, also plans to start a venture with Toshiba Carrier Corp. to make compressors used in appliances. It will hold a 95 percent stake.
The company more than quadrupled in Shenzhen trading in the year ended Feb. 15, when its shares were halted, beating the benchmark index. It will resume trading tomorrow. Little Swan, based in eastern Wuxi city, more than tripled in the year ended Jan. 11.
Midea paid 1.68 billion yuan ($235 million) for 87.7 million Little Swan shares, raising its stake to 29 percent, it said in a Shenzhen Stock Exchange statement today. The stock was bought from Guolian Group.
Foshan, Guangdong-based Midea plans to expand as higher wages and China's surging real-estate market boosts demand for refrigerators, washing machines and air conditioners. Retail sales in China, the world's fastest-growing major economy, rose 17 percent last year.
Midea bought the stake at an average price of 19.16 yuan a share, according to Bloomberg calculations. That's a 13 percent discount to Shenzhen-listed Little Swan's 21.90 yuan closing price on Jan. 11. The stock has been suspended since then.
Midea, whose 2007 net income more than doubled to 1.2 billion yuan, also plans to start a venture with Toshiba Carrier Corp. to make compressors used in appliances. It will hold a 95 percent stake.
The company more than quadrupled in Shenzhen trading in the year ended Feb. 15, when its shares were halted, beating the benchmark index. It will resume trading tomorrow. Little Swan, based in eastern Wuxi city, more than tripled in the year ended Jan. 11.
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