Fuqi will pay 135 million yuan ($18.5 million) to the current owner, Chujian Huang.
About $9.5 million consideration will be paid in cash and the remaining amount will be paid in restricted common stock.
The number of Fuqi shares included depends on the companies achieving some performance targets over a three-year period.
The deal is expected to close by the end of the first quarter of fiscal 2008.
Fuqi said the deal allows it to expand its retail presence. It reaffirmed its fourth-quarter guidance of earnings between 14 cents and 18 cents per share on revenue of about $43 million.
Shares rose 6 cents to $8.56 during afternoon trading.
Source: cnn
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