The Good Guys and JB Hi-Fi announced the deal this morning following months of negotiations and after the competition watchdog gave the green light.

Under the deal, The Good Guys will continue to operate as an independent brand and will retain its chief executive, Michael Ford, who will report to JB Hi-Fi’s boss, Richard Murray.

Both companies said they were a strong strategic fit with complementary customer bases and product offerings.

JB Hi-Fi said the deal would strengthen the group’s share of the $4.6 billion home appliances market, a category it has ventured into in recent years with the rollout of its JB Hi-Fi Home stores.

“The acquisition is a very attractive strategic opportunity,” Murray said.

The company said the strong strategic fit was “expected to deliver net synergies of $15 – 20 million per annum to the combined business after a three-year integration period, excluding one-off implementation costs”.

The acquisition will be funded by an entitlement offer valued at around $394 million and from $500 million in new and existing debt, JB Hi-Fi said.

The Good Guys co-founder and executive chairman Andrew Muir 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,” Muir said.

“We (The God Guys) grew from a single store in suburban Melbourne in 1952 to the number one retailer in our core categories.”

Ford said in a statement: “This is a fantastic opportunity for The Good Guys. We will preserve the things that have made The Good Guys great, and by combining with JB Hi-Fi, we will have the scale and resources to grow the brand and realise its full potential.”

JB Hi-Fi shares are in a trading halt.

-AAP