Wal-Mart considers taking full ownership of Seiyu
US retailer Wal-Mart Stores Inc is preparing to take full ownership of its Japan unit to speed up management changes and reverse its lagging business here, Japanese media reports said Monday.
By Agencies |
TOKYO: US retailer Wal-Mart Stores Inc is preparing to take full ownership of its Japan unit to speed up management changes and reverse its lagging business here, Japanese media reports said Monday.
Seiyu Ltd, now 50 per cent owned by Wal-Mart, the world's largest retailer, has posted losses for five straight years and is expected to see more red ink this year.
Public broadcaster NHK reported early Monday that Wal-Mart, based in Bentonville, Arkansas, is considering making Seiyu a wholly owned subsidiary.
The Tokyo Stock Exchange temporarily suspended trade in Seiyu shares following the report.
Seiyu is expected to issue several tens of billions of yen in new stock to Wal-Mart in a private placement to bolster its weak finances, the Nikkei business daily reported in its Monday evening edition.
Wal-Mart will then conduct a tender offer, seeking to obtain all outstanding Seiyu stock. With the issue closing Friday at 87 yen ($0.76; euro0.53), it would cost Wal-Mart an estimated 40 billion yen ($350 million; euro244.96 million) to acquire the balance of the stock it doesn't already own, The Nikkei reported.
Wal-Mart will delist Seiyu from the Tokyo Stock Exchange after turning Seiyu into a wholly owned subsidiary, the paper said.
Seiyu spokeswoman Michie Ichikawa said the company has made no announcement and declined comment.
Wal-Mart's earnings for this year have faltered because of slowing consumer spending in the US and abroad, but third quarter profits are expected to be better, because of better cost controls at its US stores.
Since entering the Japan market in 2002, Wal-Mart has been gradually raising its stake in Seiyu, which has some 400 stores nationwide. Wal-Mart has stuck with the Seiyu brand, familiar to Japanese, instead of using the Wal-Mart name.
Wal-Mart has also made significant investments in Japan, the world's second-largest retail market after the US, setting up a distribution facility, introducing its computerized systems, remodeling stores and opening large-scale supermarkets, which had been relatively rare in the past.
But Seiyu has continued to struggle amid intense competition from smaller retail chains, as well as from major local companies that are introducing Wal-Mart-style large-scale stores and price-cutting into Japanese retail.
Seiyu Ltd, now 50 per cent owned by Wal-Mart, the world's largest retailer, has posted losses for five straight years and is expected to see more red ink this year.
Public broadcaster NHK reported early Monday that Wal-Mart, based in Bentonville, Arkansas, is considering making Seiyu a wholly owned subsidiary.
The Tokyo Stock Exchange temporarily suspended trade in Seiyu shares following the report.
Seiyu is expected to issue several tens of billions of yen in new stock to Wal-Mart in a private placement to bolster its weak finances, the Nikkei business daily reported in its Monday evening edition.
Wal-Mart will then conduct a tender offer, seeking to obtain all outstanding Seiyu stock. With the issue closing Friday at 87 yen ($0.76; euro0.53), it would cost Wal-Mart an estimated 40 billion yen ($350 million; euro244.96 million) to acquire the balance of the stock it doesn't already own, The Nikkei reported.
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Wal-Mart will delist Seiyu from the Tokyo Stock Exchange after turning Seiyu into a wholly owned subsidiary, the paper said.
Seiyu spokeswoman Michie Ichikawa said the company has made no announcement and declined comment.
Wal-Mart's earnings for this year have faltered because of slowing consumer spending in the US and abroad, but third quarter profits are expected to be better, because of better cost controls at its US stores.
Since entering the Japan market in 2002, Wal-Mart has been gradually raising its stake in Seiyu, which has some 400 stores nationwide. Wal-Mart has stuck with the Seiyu brand, familiar to Japanese, instead of using the Wal-Mart name.
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Wal-Mart has also made significant investments in Japan, the world's second-largest retail market after the US, setting up a distribution facility, introducing its computerized systems, remodeling stores and opening large-scale supermarkets, which had been relatively rare in the past.
But Seiyu has continued to struggle amid intense competition from smaller retail chains, as well as from major local companies that are introducing Wal-Mart-style large-scale stores and price-cutting into Japanese retail.
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