JB Hi-Fi boss Richard Murray is now running Australia's biggest home appliances retailer after buying The Good Guys but he's not about to rest in the battle for business against main rival Harvey Norman.
JB Hi-Fi announced on Tuesday it has snapped up fridges and washing machines giant The Good Guys for $870 million to eclipse Harvey Norman's share of the consumer electronics and home appliances markets.
Mr Murray isn't suggesting the new scale will afford much room to relax, however.
"Harvey Norman is a great retailer and there's a number of players in the space that play hard," he told AAP.
"We operate on thin margins and the reality is you can buy that same box from the retailer next door, so we have to make sure we can do it better and faster than our competitors."
The acquisition will drive JB Hi-Fi's 19 per cent share of the consumer electronics market up to 24 per cent, beating Harvey Norman's 15 per cent share.
And its tiny three per cent portion of the $4.6 billion home appliances market will soar to 29 per cent to surpass Harvey Norman's 24 per cent share, according to JB Hi-Fi.
The deal will also boost its annual sales from just under $4 billion to $6 billion from a combined store count of 295 in Australia and New Zealand.
IG market strategist Evan Lucas said The Good Guys gives JB Hi-Fi immediate scale in the whitegoods segment, where products have much better margins than the TVs and smartphones of consumer electronics.
"The deal means JB Hi-Fi can really take on Harvey Norman in that space," Mr Lucas said.
JB Hi-Fi's purchase of The Good Guys follows months of negotiation and approval by the competition watchdog.
The Good Guys will continue to operate as an independent brand and will retain chief executive Michael Ford, who will report to Mr Murray.
The Good Guys executive chairman Andrew Muir, whose father started the business as a single store in Melbourne in 1952, said the company's lead position in home appliances was matched by JB Hi-Fi's strength in consumer electronics.
"We are bringing together two iconic Australian retail brands that have tremendously strong and loyal customer bases," Mr Muir said.
The deal is expected to deliver the group synergies of $15 million to $20 million per annum after three years, excluding implementation costs.
The acquisition will be funded by an entitlement offer valued at around $394 million plus $500 million in new and existing debt.
Under the offer, shareholders can buy one new JB Hi-Fi share for every 6.6 existing shares at $26.20 a share.
JB Hi-Fi shares are in a trading halt and lasted traded at $28.85 at Monday's close.
