Wal-Mart to Boost Its Stake in Japan’s Seiyu to More Than 50%
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Wal-Mart Stores Inc. said Friday that it would increase its stake in Japanese retailer Seiyu to more than 50% in a $600-million deal and promoted two executives to facilitate its expansion in the world’s second-largest retail market.
Wal-Mart, which has held a 42% stake in Seiyu Ltd., will purchase as much as $597 million of a $1-billion issue of ordinary and preferred shares by Seiyu, the Japanese retailer said. Mizuho Corporate Bank Ltd. and possibly other investors will buy the rest, Seiyu said.
The purchase is subject to a shareholders vote in December.
Making Seiyu a subsidiary would allow Bentonville, Ark.-based Wal-Mart to use its 400 stores to strengthen its foothold in Japan. The move would also give Wal-Mart a chance to turn around the money-losing chain.
Wal-Mart, meanwhile, said it promoted two executives to vice chairmen and has effectively swapped their duties.
Mike Duke, who has headed Wal-Mart’s domestic stores, will lead the company’s international division. John Menzer, who has been chief of international stores, will oversee the U.S. stores.
Duke has a background in logistics, which will help him further adapt Seiyu to the operating procedures of the world’s biggest retailer, said Marshal Cohen at NPD Group Inc., a market research company in Port Washington, N.Y.
“This is about movement toward solidifying their base, trying to justify the expansion of the international sector,” Cohen said.
The change moves the men closer to Wal-Mart’s president and chief executive, H. Lee Scott Jr.
Shares of Wal-Mart rose 28 cents Friday to $43.82.
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