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TOKYO - Shareholders of Japan's Seiyu Ltd. today approved plans for an equity and operational tie-up with Wal-Mart Stores Inc., clearing the way for the entry of the world's largest retailer into the Japanese market, Reuters reports.
More than two-thirds of Seiyu's shareholders approved a plan to allow Wal-Mart to take a 66.7 percent stake in the Japanese supermarket chain, which operates more than 200 stores nationwide, starting with an initial 6.1 percent holding this year.
"This shows a strong trust in the Seiyu management team and that this partnership is the right move for this company," said Wal-Mart International President and CEO John Menzer. "We will commit the resources, both people and capital, to jointly develop a feasibility study and long-range business plan."
The tie-up approval came despite the recommendation of shareholder advisory firm Institutional Shareholder Services to reject the deal because of a lack of details on the benefits of the significant share dilution.
Seiyu, which has been burdened with heavy debts from restructuring, has vowed to use its new capital to improve operations.
"This is the first year of our alliance with Wal-Mart," said Seiyu President Masao Kiuchi. "This will be a year of improving our business foundations for our future growth in the retail business."