Wal-Mart to Take Full Ownership of Seiyu
Tokyo, Wal-Mart Stores will spend up to 100 billion yen ($878 million) to buy out minority shareholders in Japanese supermarket unit Seiyu Ltd. in an effort to turn around the chain.
“Today's announcement is a reaffirmation of our commitment to Japan, the second largest economy in the world," said Mike Duke, vice chairman of Wal-Mart Stores, Inc. "The Japanese retail market is of major strategic importance to Wal-Mart, and our goal is to achieve long-term success and growth in Japan."
Wal-Mart has invested more than $1 billion in Seiyu since 2002, but has yet to see anything more than temporary upswings in sales amid tough competition with rivals such as Aeon Co.
Seiyu is headed for its sixth straight annual loss in 2007, which had led to speculation that Wal-Mart would either need to invest more in the unit or that it would pull out of Japan, as it did from South Korea and Germany last year.
The buyout will put an end to rumors Wal-Mart may abandon the Japanese market, making it easier to do business with local suppliers and lenders.
Wal-Mart currently owns 50.9% of Seiyu.