Wal-Mart looks to expand in China with 1-billion-dollar acquisition

Oct 17, 2006, 7:54 GMT

New York - Wal-Mart Stores Inc has agreed to buy a Chinese supercentre chain in a 1-billion-dollar deal that would make the world's largest retailer the biggest food and department store chain in China, The Wall Street Journal reported.

The deal would add 100 general-merchandise stores belonging to Trust-Mart, a closely held Taiwan company, to Wal-Mart's fold after the US-based retailer pulled out of Germany and South Korea this year, the financial newspaper reported, citing unnamed people familiar with the deal.

Chinese regulators must approve the acquisition, but if it gets the green light, Wal-Mart would surpass France's Carrefour SA as the company in China having the most supercentres, or stores that sell groceries as well as a wide range of general merchandise.

The Journal said Wal-Mart beat out Carrefour in the Trust-Mart deal.

Wal-Mart declined to comment on the reported transaction.

The US retailer is seeking to tap other markets as growth in its domestic base is slowing, and China offers a rapidly expanding economy, huge population and growing middle class.

However, Wal-Mart has had trouble in foreign markets this year. It sold its German stores in July at a 1-billion-dollar loss and also pulled out of South Korea in May.

It already has more than 60 of its own stores in China and said it plans to open 20 more this year.