Wal-Mart to raise stake in Seiyu
Japanese retailer has growth potential
December 13 2002
Wal-Mart is to increase its holding in Japanese supermarket operator Seiyu to more than 34 per cent from the current 6.1 per cent.
The world’s biggest retailer is exercising in full the first in a series of share options it received after taking the initial stake in Seiyu in May this year, and will now be the biggest shareholder in the business.
The cost of the increased stake is $420m, with further options between now and 2007 allowing Wal-Mart to increase its holding to at least 66.7 per cent for a total investment of $2.1bn.
Wal-Mart said the decision to increase its holding follows an intensive feasibility study of Seiyu operations and the Japanese retail market that began in July 2002. Seiyu operates both supermarkets and convenience stores.
John Menzer, president and CEO of Wal-Mart International, said: “Our studies have convinced us that Seiyu has the potential to grow and become more profitable for its stakeholders, while at the same time offering clear benefits for the Japanese consumer, such as those delivered by the Wal-Mart everyday low price strategy. While any changes introduced will happen gradually, we are excited about the chance to work closely with the proven management team at Seiyu to combine our expertise and resources for the benefit of Japanese consumers.”
The deal is expected to be completed on December 27.
