Major Chinese home appliances and air conditioner maker Gree Electric Appliances Inc announced on Tuesday it will buy all the shares of a new-energy vehicle manufacturer, in a strategic move aimed at diversifying its business base.

Under the terms of the deal, Gree, based in Zhuhai in Guangdong province, will issue new shares worth of 13 billion yuan ($1.96 billion) to buy Zhuhai Yinlong Energy Co, which focuses on research and development of lithium-ion batteries and new-energy vehicles.

Gree President Dong Mingzhu said the acquisition will help boost the company's competitiveness in core technology, especially in the emerging new-energy industry.