Wal-Mart Targets Japanese Retailer
by March 18, 2002 12:00 am 65 views
Wal-Mart Stores Inc. announced on March 14 that it has agreed to pay $46 million to buy 6.1 percent of the stock of The Seiyu Ltd., a leading Japanese retail chain with more than $8 billion in annual sales.
The deal will give Bentonville-based Wal-Mart a foothold in Japan, which has the world’s second-largest economy. With 3,240 stores and $218 billion in annual sales, Wal-Mart has already expanded into Europe, Asia and South America. Seiyu has more than 400 stores, all of which are in Japan.
As part of the agreement, Sumitomo Corporation K.K., Seiyu’s largest shareholder, will spend $38 million to increase its holding in Seiyu by 5.1 percent.
Together, that represents a purchase of about 42.5 million shares at 259 yen per share.
Sumitomo Corp.’s aggregate ownership will be about 15.6 percent. Under the agreement, Wal-Mart will be able to “inject up to 260 billion yen ($2 billion) of new equity into Seiyu, raising its stake up to 66.7 percent over time,” according to a company press release.
“Wal-Mart, Seiyu and Sumitomo view this agreement as the first step in a long-term partnership,” the press release stated.