Shoppers walk past stores of Australian electronic goods retailers JB Hi-Fi and the privately-held 100-store rival The Good Guys located in a shopping center in Sydney, Australia, May 19, 2016.
Shoppers walk past stores of Australian electronic goods retailers JB Hi-Fi and the privately-held 100-store rival The Good Guys located in a shopping center in Sydney, Australia, May 19, 2016. Reuters/David Gray

JB Hi-Fi has secured an $870 million deal to buy appliance store The Good Guys. The two businesses will continue to run independently.

The acquisition was announced Tuesday, with JB Hi-Fi expected to increase its share of consumer electronics market from 19 percent to 24 percent and beat competitor Harvey Norman’s 15 percent. The electronics company giant added that its $4.6 billion home appliances market is predicted to surge 29 percent, surpassing Harvey Norman’s 24 percent

Although the numbers appear to be in JB Hi-Fi’s favour, CEO Richard Murray said there’s still no time to relax as Harvey Norman and other businesses in the same industry might catch up.

“We operate on thin margins and the reality is you can buy the same box from the retailer next door, so we have to make sure we can do it better and faster than our competitors,” he told AAP.

The deal follows months of negotiations approved by the Australian Competition and Consumer Commission. JB Hi-Fi is funding the deal through an entitlement offer valued at $394 million, with the remaining $500 million coming from new and existing debt.

“The acquisition is a very attractive strategic opportunity for JB Hi-Fi since The Good Guys is a highly complementary business which is aligned with our management philosophy and significantly enhances our offering in the $4.6 billion home appliances market,” Murray said in a statement.

Michael Ford, the CEO of The Good Guys, will continue his leadership role in the company that’s now under the JB Hi-Fi ownership. He will report to Murray in this new setup.

Harvey Norman, on the other hand, isn’t threatened by its rival’s acquisition of The Good Guys. “Why would it?” founder Gerry Harvey said to the Daily Telegraph.

The company remains at the top with $5.518 billion market capitalisation. JB Hi-Fi and The Good Guys combined is only around $3.7 billion.