Wal-Mart agrees to buy Chinese chain: WSJ
CHICAGO – Wal-Mart Stores Inc. has agreed to acquire a Chinese supercenter chain for about $1 billion in a move that would give the world’s largest retailer the biggest food and department store network in China, the Wall Street Journal reported.
The deal is for the 100 Chinese supercenters owned by Trust-Mart, a closely held Taiwanese company, the Wall Street Journal reported in its online edition, citing unnamed people familiar with the deal.
A Wal-Mart spokeswoman declined to comment.
If approved by Chinese regulators, the deal would push Wal-Mart past Carrefour SA (CARR.PA) for the most supercenters in China. Supercenters, also known as hypermarkets, are giant stores that sell a wide range of general food and merchandise.
Wal-Mart beat Carrefour out in bidding for the Trust-Mart stores, the Wall Street Journal said.
Trust-Mart posted 2005 sales of about $1.42 billion at its Chinese hypermarkets, according to Euromonitor data, well above Wal-Mart’s $764 million in its Chinese stores. By comparison, Carrefour had 2005 sales of $2.17 billion at its Chinese hypermarkets.
Wal-Mart has made no secret of its ambitions in China. The retailer has said that its operations there could be as big as its U.S. business in 20 years. Wal-Mart currently has more than 3,700 U.S. stores, but only about 60 in China.
In March, the retailer said it planned to hire some 150,000 people in China over the next five years — five times the number it currently employs — as it prepares for a major store expansion. In recent weeks, the state-controlled All-China Federation of Trade Unions has organized workers at all of Wal-Mart’s China stores.
International expansion has become increasingly important for Wal-Mart as its U.S. sales growth slows. Its U.S. discount stores posted 7.9 percent sales growth for September, while the international business turned in a strong 32 percent gain.
Wal-Mart’s international operations have endured some high-profile setbacks this year, however, as the retailer pulled out of South Korea and Germany. Shares of Wal-Mart were down 19 cents, or 0.4 percent, at $48.27 in late-session trading on the New York Stock Exchange.