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October 15, 2013

CHINA: Wumart buys stores from Thai-backed retailer C.P. Lotus

Chinese grocer Wumart Stores has snapped up stores from C.P. Lotus, a local retailer owned by Thai conglomerate Charoen Pokphand Group.

By Dean Best

Chinese grocer Wumart Stores has snapped up stores from C.P. Lotus, a local retailer owned by Thai conglomerate Charoen Pokphand Group.

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Wumart has acquired 36 C.P. Lotus stores for HK$2.34bn (US$301.8m). The deal takes in outlets in Beijing and Shanghai but excludes those in Guangdong and Hunan provinces.

In separate transactions, the two companies have also decided to buy stakes in each other.

Wumart has acquired 9.99% of C.P. Lotus for a further HK$547.9m. C.P. Lotus will pay HK$2.89bn for a 13.77% stake in Wumart.

Both sides have agreed to keep their stakes in each other for at leats 18 months. C.P. Lotus plans to “enter into undertakings to limit its potential ownership” of Wumart, the companies said.

Wumart said the C.P. Lotus stores would give it “an immediate entry into important geographic regions such as eastern China”. 

It added: “The established network and premium locations of the acquired stores would otherwise be difficult to build organically.”

The stake in C.P. Lotus “exposes Wumart to the important Guangdong market with potential opportunities for further collaboration”, it added.

C.P. Lotus said its shares in Wumart would allow it “to participate in the combined operations of Wumart’s current operations and the acquired Shanghai and Beijing operations of C.P. Lotus”.

The company said it would focus on expanding its “highest growth areas” in Guangdong and Hunan.

Related Companies

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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