Gome and Yongle helping each other

3 January 2007 — Hong Kong (CHN): Gome Electrical and Yongle have agreed to buy and sell electronic products from one another in a bid to enhance synergies between each other, following their merger last year.

Gome has agreed to buy products at cost from Yongle, to an annual limit of CNY125 million ($15 million) and Yongle has agreed to buy up to CNY125 million ($15 million) worth of electronic products this year from Gome.

 

In a joint statement, Gome and Yongle said: "By adopting such arrangements, GOME and Yongle are of the view that they will be better positioned to enjoy procurement synergies and enhanced inventory management and sales coordination as a result of the merger."

 

According to Gome, the company has already acquired over 90 percent of Yongle and it is entitled and legally obligated to acquire the remaining ten percent stake by the end of the month.