Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

GOME ELECTRICAL APPLIANCES HOLDING LIMITED

國 美 電 器 控 股 有 限 公 司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 493) CONNECTED TRANSACTION THE ACQUISITION

The Board is pleased to announce that on 23 January 2017, the Purchaser, a wholly-owned subsidiary of the Company, entered into the Agreement with the Vendors pursuant to which the Purchaser has conditionally agreed to acquire the Sale Shares from the Vendors at an aggregate consideration of RMB900,000,000.

The Target Company is principally engaged in the business of mobile social data platform.

Upon completion of the Acquisition, the Purchaser will be interested in 60% of the Target Company. The Target Company will become a non wholly-owned subsidiary of the Company and the Target Company's financial results will be consolidated into the financial statements of the Group.

LISTING RULES IMPLICATIONS

The Vendors are companies owned by the Controlling Shareholder and his associates. Accordingly, the Acquisition constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. As the applicable percentage ratios in respect of the Acquisition exceed 0.1% but are less than 5%, the Acquisition is subject to the reporting and announcement requirements and exempted from the Independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

Shareholders and potential investors should note that Completion is subject to the fulfillment of the conditions precedent set out in the Agreement and therefore may or may not occur. As the Acquisition may or may not proceed to Completion, Shareholders and potential investors are reminded to exercise caution when dealing in the securities of the Company. THE ACQUISITION

The Board announces that on 23 January 2017, the Purchaser entered into the Agreement with the Vendors with respect to the Acquisition.

The Agreement Date

23 January 2017

Parties

(1)

Purchaser:

北京匯海天韻商務諮詢有限公 司(Beijing Huihai Tianyun Commercial Consultancy Co., Ltd.*), an indirect wholly owned subsidiary of the Company;

(2)

Vendors:

(a) 北京鵬潤投資有限公司(Beijing Eagle Investment Co., Ltd.*);

(b) 多邊金寶商業有限公司(Duobian Jinbao Commercial Company Limited*);

(c) 天津國美互聯網資產交易中心有限公司(Tianjin GOME Internet Assets Exchange Centre Company Limited*); and

(d) 北京大康國際鞋城有限公司(Beijing Dakang International Shoes City Company Limited*).

Each of the Vendors is a company owned by the Controlling Shareholder and his associates and is a connected person of the Company.

Subject matter

The Purchaser has conditionally agreed to acquire from the Vendors and the Vendors have conditionally agreed to sell to the Purchaser the Sale Shares. The Sale Shares represent 60% of the existing registered capital of the Target Company.

Upon Completion, the Purchaser will hold 60% of the registered capital of the Target Company.

Consideration

Consideration for the acquisition of the Sale Shares

The consideration for the acquisition of the Sale Shares is RMB900,000,000 and was determined by the parties after arm's length negotiations with reference to, among other things, (i) the gross merchandise volume (GMV) of RMB1,179 million generated by the Target Company in 2016; (ii) the number of existing customers of the Target Company; (iii) the business prospects of the Target Company; and (iv) an asset valuation report of the Target Company issued by an independent asset valuer. The consideration will be payable by the Purchaser in one lump sum within 15 business days of Completion.

Conditions Precedent

Completion will be conditional upon the satisfaction of the following conditions:

  1. the transactional documents becoming effective: (i) the Vendors having executed and delivered the documents in relation to the transfer of the Sale Shares to the Purchaser, (ii) the transactional documents being true, complete and legally effective, and (iii) the Target Company and the Vendors having complied in all respects their obligations under the transactional documents;

  2. the Target Company having completed its internal approvals in respect of the transactions contemplated under the Acquisition, including, without limitation, the shareholders resolutions executed by the shareholders of the Target Company, the share transfer agreement and the revised articles of associations of the Target Company for the registration of the transfer with the administrative bureau for industry and commerce.

Completion

Completion will take place upon satisfaction of conditions (a) and (b) as set out above, the transfer of the equity interests of the Target Company to the Purchaser and completion of the change of business registration of the Target Company.

INFORMATION ON THE TARGET COMPANY

The Target Company is a limited liability company established in the PRC and is principally engaged in the business of mobile social data platform.

Financial Information of the Target Company

Set out below is the audited consolidated financial information of the Target Company for the two financial years ended 31 December 2015 and 2016 prepared in accordance with the PRC Accounting Standards for Business Enterprises:

For the year ended 31 December 2015 2016

RMB' million RMB' million

Loss before tax (75.8) (97.3)

Loss after tax (75.8) (97.3)

As at 31 December 2016, the consolidated net assets value of the Target Company was a deficit of RMB229.5 million.

Shareholding Structure of the Target Company

  1. Shareholding structure of the Target Company as at the date of this announcement:

    the Vendors

    60%

    GOME Holding GOME Financial Holdings

    30% 10%

    the Target Company

  2. Group structure of the Company and the Target Company upon Completion:

the Company

100%

the Purchaser

60%

GOME Holding GOME Financial Holdings

30% 10%

the Target Company

Upon Completion, the Purchaser will hold 60% of the registered capital of the Target Company. Accordingly, the Target Company will become a non wholly-owned subsidiary of the Company and the Target Company's financial results will be consolidated into the consolidated financial statements of the Company.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The principal activities of the Group are the operation and management of networks of electrical appliances, consumer electronic products retail stores and electronic products on-line sale in the PRC.

In the Internet era with the rise of the sharing economy, consumer demands have become more diversified, quality-oriented, and personalized. The ability to understand and adapt quickly to consumer desires under the new consumption model are the main challenges faced by retailers today. In the current new retail era, it is necessary for retailers to identify deeper consumer desires, and to promote value-added services to enhance the customer experience. In order to cultivate customer loyalty, extensive research and study of the consumption process of commercial merchandise, as well as exploration of correlations with other consumption scenarios are required. These can all be achieved through systematic filtering and analysis of big data.

GOME Electrical Appliances Holdings Limited published this content on 23 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 23 January 2017 08:50:03 UTC.

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