(Yicai Global) April 15 -- JD.Com plans to acquire home appliance retailer 5Star, which operates a chain of over 220 physical stores in China, in the latest move by the country's second-largest e-commerce seller to expand its offline business.
The due diligence JD.Com's team has conducted at 5Star over two months is drawing to an end, Securities Daily reported today, citing an anonymous insider. Beijing-based JD.Com said it had no information to disclose at the moment, while a 5Star official gave no comment.
But a deal is far from certain. JD.Com and 5Star's shareholders have been in negotiations for a long time as the acquisition involves the interests of owners and managers in addition to price. 5Star is also ambitious and is continually looking for chances to expand, making the acquisition a bit more difficult, the report noted, citing the insider.
Founded in 1998, 5Star has stores in seven provinces, including Jiangsu and Zhejiang. JD.Com's cooperation with the retailer began in 2017, when they jointly set up experience shops across the nation. They have opened 20 stores in Luoyang, Hangzhou, Suzhou, Fuzhou and other cities.
Both parties are exploring new retail models together, according to an executive at 5Star, who wished to remain unidentified, adding that JD.Com is mainly interested in 5Star's store network in third- and fourth-tier cities and its other resources.
Nanjing-based 5Star is also pursuing expansion and has always intended to merge with and acquire other regional chain store operators, the executive said. She revealed that the retailer will further explore more channels. The report did not clarify if the 5Star executive and the insider are the same person.