Under the terms of the agreement, Lianhua Supermarket will acquire 100% of the equity of Hualian Supermarket for approximately CNY492m (US$137.8m).
The acquisition will see Lianhua take control of 1,396 Hualian supermarkets, boosting Lianhua’s market share in the Yangtze River Delta region, and especially the Shanghai region.
The company said the agreement would make it “a dominant player” in Shanghai’s supermarket business, increasing its purchasing power, procurement scale and franchise business.
“The acquisition helps to expand Lianhua Supermarket’s economies of scale and builds on our competitive strengths. As a result, we will become the dominant supermarket player in the Yangtze River delta region and our influence in the provinces of Zhejiang and Jiangsu will be deepened,” chairman Ma Xinsheng said.
“Looking ahead, together with Hualian Supermarket, Lianhua Supermarket will continue developing its ‘Strong Outlet Strategy’ and explore market opportunities by adopting a dual-brand marketing strategy and integration of resources. We aim to become the largest and most efficient retail chain operator in China and create values for our shareholders,” he continued.