South Korean retailer Shinsegae Co. said Monday it will buy the local operations of U.S. retail giant Wal-Mart Stores Inc. for 825 billion won (US$870 million).
Shinsegae, which operates E-Mart, the nation's No. 1 discounter, said it will buy 16 Wal-Mart stores and rename each of them E-Mart.
The number of E-Mart stores will rise to 102, including seven Chinese units, it added. E-Mart dominates the local discount market with a share of around 30 percent.
Shinsegae said it will run the Wal-Mart stores as an independent entity and retain all of its jobs.
Wal-Mart Korea posted a net loss of 9.9 billion won on sales of 728.7 billion won in 2005. It has assets of 874 billion won and hires 3,356 workers. Wal-Mart Korea, which entered the local market in 1998, is the weakest performer of the nation's five major discount chains.
Shinsegae said it had been in talks with Wal-Mart since March and reached an agreement in Tokyo recently. "The takeover will help E-Mart operate its domestic business stably and spur its advance into the Chinese discount market," a Shinsegae official said.
Wal-Mart said it has decided to withdraw from the South Korean market since market conditions are not causing the company to achieve growth levels it hopes for.
"We have decided to sell our business to the market leader as we believe this is the best option for our associates, customers and shareholders," said Mike Duke, vice chairman of Wal-Mart Stores.
Shinsegae's planned purchase of Wal-Mart comes after it failed to acquire Carrefour Korea Ltd., the nation's No. 4 discounter, last month. Eland Corp., an unlisted clothing manufacturer, bought Carrefour Korea for 1.75 trillion won. Seoul, May 22 (Yonhap News)
Shinsegae to buy Wal-Mart Korea for 825 bln won |
