Wal-Mart May Buy Chain in China
Wal-Mart Stores Inc., facing slowing growth in the U.S., has agreed to buy a chain of food and department superstores in China for about $1 billion, a person familiar with the proposed acquisition said Monday.
The deal to acquire Taiwanese retailer Trust-Mart must be approved by Chinese regulators and may not be announced for weeks, said the person, who declined to be identified before any official statement.
Bentonville, Ark.-based Wal-Mart’s planned acquisition comes after the company’s sale of its German stores in July at a loss of $1 billion and its exit from South Korea in May. The world’s largest retailer is counting on international growth to counteract slowing U.S. sales and wants to generate 33% of its revenue and profit overseas, up from 20% currently.
“This will give them more scale in a market that is going to be increasingly more important for them,” said Patricia Edwards, a Seattle-based money manager at Wentworth, Hauser & Violich, with $8.2 billion in assets including Wal-Mart shares.
Wal-Mart initially will purchase 31 stores from Trust-Mart and gradually increase its holdings, giving it a bigger foothold in China than French rival Carrefour, the Wall Street Journal reported Monday.
Wal-Mart spokeswoman Beth Keck declined to comment. Wal-Mart operates more than 60 stores in China.