Wumart Reaches Agreement to Buy Most of Lotus' Outlets in China -Source

   By Cynthia Koons and Laurie Burkitt 
 

Chinese supermarket chain Wumart Stores Inc. (1025.HK) is buying the majority of CP Lotus Corp.'s retail outlets in China for between US$350 and US$400 million, a person familiar with the matter said Tuesday, the latest move in consolidating China's fragmented grocery retail market.

The acquisition will add to Hong Kong-listed Wumart's fleet of 145 supermarkets and 396 mini-markets across China. CP Lotus, listed in Hong Kong and controlled by Thai billionaire Dhanin Chearavanont, has 54 hypermarkets, large stores that sell household goods and clothing in addition to food, and two supermarkets in China. The deal is expected to be announced later today, people familiar with the situation said.

Increased competition amid a vast, fragmented market of grocery and hypermarkets is sparking consolidation. Wal-Mart Stores Inc. (WMT), which operates nearly 400 stores in China, said in an interview with the Wall Street Journal last week that it is eyeing acquisitions in the country to strengthen its position in regions where it doesn't already operate.

China Resources Enterprise Ltd. (0291.HK), which runs more than 4,100 retail outlets across China, recently expanded its store network, adding 131 stores, by forming a joint venture with U.K. retailer Tesco PLC.

Write to Cynthia Koons at [e-mail]

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