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