Kingfisher plc announced an agreement to sell controlling stake in its B&Q China business
Home improvement giant Kingfisher announced last month that it had entered into a binding agreement to sell a controlling 70% stake in its B&Q China business to Wumei Holdings Inc for a total cash consideration of £140 million.

The move follows Kingfisher's announcement in March of its plans to look for a strategic partner to help develop its B&Q business in China.

The transaction is conditional on MOFCOM (Chinese Ministry of Commerce) approval and, if approved, is expected to close during the first half of 2015.

It is the first major decision taken by Véronique Laury since she took over the role of Kingfisher group chief executive from Sir Ian Cheshire in December. She said of the deal: "I am delighted to have found a strong retail partner who will help us to release the financial value of our business in China. This will enable us to focus our financial resources and management talent on the large and attractive European home improvement market."

B&Q opened its first store in China in 1999 and now has 39 outlets employing more than 3,500 people but the group has struggled to transfer its business model to a country, which has a strong do-it-for-me culture and where DIY is not perceived as a pastime. Despite adapting its retail offer to include services, such as apartment decorating and kitchen and bathroom fitting, B&Q China's performance has failed to impress over the years and has been a drain on the group's finances.

For H1 2014/15, ended August 2014, B&Q China sales dropped by 7.6% to £163m, impacted by a slowing Chinese property market, which was down around 18%, said Kingfisher. The retail loss was £11million (2013/14: £7million reported loss) including around £2m of costs relating to a new store format trial.