Wal-Mart's US$1 Billion deal in China?

October 24, 2006 - by Will

According to reliable sources and quoting Wall Street Journal report, rumour had it that Wal-Mart Stores Inc. is ready to splash US$1 billion to acquire China Retailer - "Hao You Duo" - Trust-Mart hypermarket chain.

Just about 2 months ago, Wal-Mart had taken a move to withdraw and exit from the German & South Korean market with its 85 existing retail stores and now, using the exact US$1 billion obtained from the said sales price and preparing its further expansion plan in China has no doubt created a lot of speculations of coincidence.

This transactions, although yet to obtain confirmation from either party, if successful, this could give the world's largest retailer the biggest food and department store network in China.

The deal for the Chinese hypermarkets of Trust-Mart, a closely held Taiwanese company, comes as foreign retailers look to tap China's fast-growing economy, large population and expanding middle class.

It was reported that Wal-Mart has defeated its arch rival, the French's Carrefour in their bid to acquire Trust-Mart, and if approved by the regulators, the transaction would vault Wal-Mart as the BOSS, in terms of number of hypermarkets in China.

Wal-Mart's acquisition of Trust-Mart, which rumour had it that the deal was concluded more than a month ago, requires regulatory approval from China's Ministry of Commerce.

The process to gain approval by the Chinese government authority for foreign companies can be complex and time consuming.

Some brief facts about Trust-Mart

Established since 1997, having approximately 100+ chain stores, total labor force of close to 30,000. At present, Trust-Mart has the most outlets / retails stores within the inner mainland.

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