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TOKYO - Wal-Mart Stores Inc. will raise its stake in Japanese supermarket operator Seiyu Ltd. to 34 percent from 6.1 percent, making it Seiyu's largest shareholder, Dow Jones Newswire reports.
Wal-Mart bought the 6.1 percent stake earlier this year with an option to buy further stakes later. Wal-Mart has the option to raise its stake even further, to 66.7 percent, by the end of 2007.
Seiyu said Thursday that it agreed to give Wal-Mart stock-purchasing rights in May.
Wal-Mart group company Wyoming Holding GmbH will pay 52.06 billion yen ($421.2 million) for the new Seiyu shares later this month.
Analysts say Wal-Mart's move may have been encouraged after late last month, Seiyu agreed to sell its nonbank unit Tokyo City Finance Co. to the Lone Star Fund, a U.S. investment group that has been active in Japan and South Korea in the past few years.
The sale of Tokyo City Finance will leave Seiyu with a special loss of 51.7 billion yen, but the unit has long been viewed as a major headache for Seiyu, which has been speeding up reform steps to concentrate on its core retail operations.
As of Aug. 31, Seiyu had debt of 609.3 billion yen. Its financial standing has lagged behind that of other Japanese supermarket stores, such as Ito-Yokado Co. and Aeon Co., partly because its finances were considerably weakened by its extension of aid to Tokyo City Finance. As part of its restructuring plans, Seiyu has remodeled stores and withdrawn from non-retail operations.
Wal-Mart has long viewed Japan's huge retail market as a key element in its plans to expand internationally.