(Yicai) Nov. 7 -- Infore Group, an investment company controlled by the son of the founder of Chinese home appliance giant Midea Group, is planning to acquire Jason Furniture, one of the world’s largest suppliers of upholstered furniture.

Kuka Group, the biggest shareholder, and TB Home, a party acting in concert, are working to transfer a stake in Jason Furniture to Infore or its affiliate, which could change the status of the controlling shareholder, the Hangzhou-based target company announced yesterday. Its shares [SHA: 603816] have suspended trading since yesterday. 

Midea, Infore, and Jason Furniture would be indirectly linked. Infore is controlled by He Jianfeng, son of He Xiangjian, the founder of Foshan-based white goods giant Midea. He Jianfeng is a director at Midea, which is starting to make more smart home appliances, but he does not participate in the firm's daily operations.

In addition, Li Donglai, president of Jason Furniture, used to be president of Midea's refrigerator division and air conditioning business, among other positions.

Jason Furniture’s share price is relatively low, resulting in acquisition potential, Zhang Yi, chief executive and chief analyst of iiMedia Research, told Yicai. Such a plan of a company linked to Midea could extend its strategic and industrial layout to integrate home appliance and home furniture businesses and sales channels, Zhang added. 

A distributor in Wuhan said to Yicai that Jason Furniture recorded poor sales last year as its business has been hurt by the emerging trend of customized furniture.

The equity transfer could start a new wave of integration in the home furnishing industry, an industry insider said to Yicai. Infore has capital strength and industrial resources so it could offer support to help  Jason Furniture expand rapidly, the source added.

The same insider said that Jason Furniture has already reached a threshold of CNY20 billion (USD2.7 billion) in annual sales and if its new parent would help it to widen its scope to more brands and categories it is quite possible for the furniture provider to become the No. 1 industry player in the domestic market to hit an annual revenue milestone of CNY100 billion (USD13.7 billion).

Editors: Tang Shihua, Emmi Laine