(Yicai Global) Nov. 17 -- Gree Electric Appliances, the largest white goods maker in China, announced it will invest CNY3 billion (USD470.2 million) to buy a nearly 40 percent stake in parts producer Dun’an Artificial Environment.

The deal, which will make the home appliance maker Dun’an’s controlling shareholder, will help with Gree’s diversification push as well as improving its industry chain positioning, Zhuhai-based Gree said in a statement issued yesterday.

Headquartered in Hangzhou, Dun’an manufactures parts and components for air-conditioning accessories and new energy vehicles, for both household and commercial use. Its shares [SHE:002011] closed up 10 percent today at CNY9.44 (USD1.48) each.

The investment will boost Gree’s competitiveness in terms of core parts and components, which will help with its air-conditioning and new energy vehicle parts businesses, China International Capital Corporation said in a research report published today.

Amid China’s sluggish air-conditioning market, Gree has been making acquisitions this year to accelerate its diversification. It spent CNY1.83 billion (USD286.5 million) on a 30.47 percent stake in energy storage devices maker Yinlong Energy in August.

Sales of air-con units in China slumped this year and Gree’s earnings have also skidded. Its third-quarter net profit fell 15.7 percent from a year earlier to CNY6.2 billion on a 16.5 percent decline in revenue to CNY47.1 billion (USD7.4 billion).

Shares of Gree [SHE:000651] ended little changed at CNY36.33 (USD5.69) apiece.

Editors: Xu Wei, Tom Litting