USA: PriceSmart announces Mexico JV with Grupo Gigante
San Diego-based PriceSmart yesterday [Wednesday] announced a major investment by, and the entering of a joint venture agreement with, Grupo Gigante , one of Mexico's largest grocery and retail store chains. PriceSmart and Gigante have agreed to invest initially up to a total of US$40m for the opening of Mexico's first four PriceSmart stores within the next 18 months, with two of the stores to open in time for the 2002 Christmas shopping season, and may invest additional funds as necessary for further expansion of the joint venture in the future. PriceSmart and Gigante will contribute US$20m each to the 50/50 venture. PriceSmart, through a management agreement, will run the day-to-day operations of the warehouses and the JV will benefit from the purchasing power that Gigante brings to the transaction with its US$3bn in annual sales.
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