Wal-Mart to gobble up rest of Japan retailer Seiyu
Tokyo,
Oct
22:
Wal-Mart
Stores
Inc
will
spend
up
to
100
billion
yen
($878
million)
to
buy
out
minority
shareholders
in
Japanese
supermarket
unit
Seiyu
Ltd
in
an
effort
to
turn
around
the
loss-making
chain.
The world's largest retailer has invested more than $1 billion in Seiyu since 2002, but has yet to see anything more than temporary upswings in sales amid tough competition with rivals such as Aeon Co.
Seiyu is headed for its sixth straight annual loss in 2007, which had led to speculation that Wal-Mart would either need to invest more to shore up the unit or that it could pull out of Japan, as it did from South Korea and Germany last year.
Wal-Mart, which currently owns 50.9 percent of Seiyu, said it would offer 140 yen per Seiyu common share in a tender offer from Tuesday through Dec. 4. The offer price marks a 61 percent premium to Friday's closing share price of 87 yen.
Last month, Seiyu said it would offer early retirement to 450 of its employees, or about 7 percent of its total work force. In 2004 the company eliminated about 1,600 jobs.
Cracking Japan's retail market, the world's second-largest, has proved a challenge for foreign companies, due to fickle shoppers and tough competition.
In recent years France's Carrefour and Britain's Alliance Boots have both pulled out of the market. Shares of Seiyu have lost three-quarters of their value since the end of 2002, the year when Wal-Mart first bought into the supermarket. During the same period, the Tokyo bourse's index of retail stocks IRETL.has gained about 25 percent.
Reuters
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