Wal-Mart to buy retail chain in China

BEIJING – Wal-Mart Stores Inc. will pay about US$1 billion to buy a chain of 100 hypermarkets in China in a deal that could vault it ahead of competitors to become the country’s biggest food and department store network, a news report said yesterday.

Wal-Mart plans to buy the hypermarkets from Trust-Mart, a Taiwanese company, The Asian Wall Street Journal said, citing people familiar with the transaction. The Financial Times, citing people close to the negotiations, said Wal-Mart had emerged as the leading bidder for the chain but said no agreement had been reached.”We don’t have any comment on any of this market speculation,” said Jonathan Dong, a spokesman for Wal-Mart China.Calls to Shanghai Trust-Mart Co.rang unanswered yesterday morning local time.Foreign retailers are trying to tap China’s fast-growing economy, large population and expanding middle class.The Wal-Mart deal, if completed, would follow the Bentonville, Arkansas-based company’s recent exit from both Germany and South Korea.A hypermarket combines a supermarket and a department store in a giant facility with a full line of groceries and general merchandise.Such a deal would vault Wal-Mart past its rival, Carrefour SA of France, in the number of hypermarkets in China.Wal-Mart beat out Carrefour for the Trust-Mart purchase, the Journal said, citing people involved in the deal.Wal-Mart has 66 stores in China and says it plans to increase in size fivefold in the next five years.The transaction is structured to take place in phases, with Wal-Mart acquiring 31 stores initially, the Journal reported.It said Wal-Mart will acquire the remainder of Trust-Mart’s 100 stores over the next three years as each outlet meets various criteria, including compliance with fire codes.Nampa-APThe Financial Times, citing people close to the negotiations, said Wal-Mart had emerged as the leading bidder for the chain but said no agreement had been reached.”We don’t have any comment on any of this market speculation,” said Jonathan Dong, a spokesman for Wal-Mart China.Calls to Shanghai Trust-Mart Co.rang unanswered yesterday morning local time.Foreign retailers are trying to tap China’s fast-growing economy, large population and expanding middle class.The Wal-Mart deal, if completed, would follow the Bentonville, Arkansas-based company’s recent exit from both Germany and South Korea.A hypermarket combines a supermarket and a department store in a giant facility with a full line of groceries and general merchandise.Such a deal would vault Wal-Mart past its rival, Carrefour SA of France, in the number of hypermarkets in China.Wal-Mart beat out Carrefour for the Trust-Mart purchase, the Journal said, citing people involved in the deal.Wal-Mart has 66 stores in China and says it plans to increase in size fivefold in the next five years.The transaction is structured to take place in phases, with Wal-Mart acquiring 31 stores initially, the Journal reported.It said Wal-Mart will acquire the remainder of Trust-Mart’s 100 stores over the next three years as each outlet meets various criteria, including compliance with fire codes.Nampa-AP