Guangdong Homa Group is paying CNY330 million (USD46.2 million) to acquire TCL Home Appliances (Hefei), the sister firm of its majority shareholder TCL Home Appliances Group under TV giant TCL Electronics, to eliminate direct competition within TCL.

Homa will purchase a 100 percent stake in TCL Home Appliances (Hefei), using its own funds or funds raised by itself, the Zhongshan-based company said.

The two brands will continue to co-exist, Homa said. TCL Home Appliances will continue to specialize in TCL branded fridges and washing machines, while Homa will remain an Original Design Manufacturing supplier.

Homa will branch into washing machines through this acquisition, said Wang Juan, a senior analyst at Chinaiol. The impact on the white goods sector depends on Homa’s actions after the take over and how the businesses are integrated.

The takeover is expected to boost Homa’s refrigerator and freezer production to nearly 20 million units a year.

The main impact will be to boost Homa’s competitiveness overseas, said Peng Yu, chief operating officer of consultancy firm Sandalwood Advisors.

TCL refrigerators ranked in eighth place in terms of China’s online refrigerator sales from January to October with a market share of 2.94 percent, while Homa took 22nd place with a market share of 0.35 percent, Peng said.

Meanwhile, Homa continues to hike capacity. The first phase of its high-end air-cooled refrigerator smart factory came online last month and is expected to boost output by 1.4 million units a year. The second phase is proceeding as planned, and once fully up and running, the plant will manufacture 2.8 million fridges a year.

Homa logged an 81.8 percent leap in net profit in the first three quarters from a year ago to CNY597 million (USD83.6 million), while revenue soared 36.5 percent to CNY8.1 billion (USD1.1 billion).

Homa’s share price [SHE: 002668] was trading down 2.6 percent at CNY6.57 (USD0.92) as of 1.30 p.m. today.