China's biggest home appliance retailer, Gome Electrical Appliance Holding Ltd, finalized its HK$5.27 billion (US$675.64 million) deal to acquire its rival China Paradise Electronics Retail Ltd yesterday, better positioning the firm to ward off foreign competition in the sector.

Gome chief executive officer Huang Guangyu (L), and China Paradise chairman Chen Xiao, shake hands during a news conference in Beijing on July 25, 2006. [Reuters]

Gome agreed to pay HK$409 million (US$52.44 million) and one new share for every 3.08 shares in China Paradise, the company said at a press conference held last night.

The deal values China Paradise at HK$5.27 billion (US$680 million), which represents a 9 per cent premium at China Paradise, based on the closing price of the two companies.

Gome Chairman Huang Guangyu, ranked China's richest businessman last year, will remain as chairman of the new company. Current China Paradise Chairman Chen Xiao will become the merged company's chief executive officer.

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