GOME Electrical Appliances, China's largest electronics retailer, has strengthened its dominance in key Chinese market after taking over the management of its major rival Dazhong Electrical Appliances.

    GOME has lent a loan to a third party to buy the Beijing-based rival which has annual sales of about 6 billion yuan, and takes over its management. It will have an exclusive option to buy Dazhong for not less than 3.65 billion yuan, He Yangqing, Gome's spokesman told a press conference on Sunday.

    "We need time to get the regulatory approvals, and there are uncertainties involved, so we adopted this transition," said He, adding Dazhong hopes the transaction will close as soon as possible.

    After the deal, the Shanghai-Based GOME will have more than 100stores in both Shanghai and Beijing. The stores will operate under the two brands but funding, sourcing and logistics will merge, according to He.

    Dazhong is the fourth-largest appliance retail chain in China after Gome, Suning Alliance Co and Jiangsu Five Star Appliance Co, which is majority-owned by Best Buy, the largest U.S. electronics retailer.

    GOME's arch rival Suning Appliance Co. withdrew from Dazhong's acquisition competition after it announced on Thursday to halt the talks with Dazhong for divergence on core merger terms.