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JB Hi-Fi given thumbs up for Good Guys buy

AAP logoAAP 10/08/2016 Petrina Berry

JB Hi-Fi has been given regulatory approval to acquire whitegoods retailer The Good Guys but it is not clear if any takeover will go ahead.

The Australian Competition and Consumer Commission (ACCC) gave the consumer electronics and kitchen appliances retailer the thumbs up to buy The Good Guys on Thursday.

ACCC chairman Rod Sims said the proposed takeover would not reduce competition in consumer electronics or whitegoods as JB Hi-Fi and The Good Guys were focused on different product categories and customers.

"Other retailers such as Harvey Norman have a much higher degree of overlap with The Good Guys than JB Hi-Fi," Mr Sims said.

"We considered that the combined company would continue to face strong competition from Harvey Norman and other existing retailers such as Betta, Retravision, Bing Lee and Radio Rentals."

While JB Hi-Fi stores were mainly in shopping centres and CBDs, its target was based in suburban home retail centres, Mr Sims said.

JB Hi-Fi noted the ACCC's support but made no further comment.

"JB Hi-Fi continues to participate in the sale process but has made no decision," a statement from the company said.

The retailer said it understands The Good Guys was still considering a range of options including floating on the Australian Securities Exchange.

The company has previously rejected speculation that it did not have the financial capacity to buy The Good Guys, which analysts say would not come at a discount.

The Good Guys has declined to comment, however in July it began an investor roadshow for a stock market float.

Shares in JB Hi-Fi jumped by more than five per cent following the ACCC's announcement.

At 1455 AEST, its shares were up 56 cents, or 2.12 per cent, at $27.01.

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