China's Wumart Stores has acquired the supermarket chain Beijing MerryMart Chainstores Development Co. Ltd. (Mei Lian Mei). Upon the completion of the acquisition of shares of Mei Lian Mei and the increase of capital investment, Wumart will own 75% in Mei Lian Mei.

The total consideration of the transaction is approximately RMB370m (US$45.9m), including the share transfer of Mei Lian Mei and an increase in capital investment by Wumart. Wumart said it would make the acquisition from internal funds. Minority shareholders, who are also the principle members of the management team, will own the remaining 25% of the supermarket company.

Mei Lian Mei is a registered Chinese company in Beijing, operating 23 large and medium size supermarkets. It is the fourth largest Beijing supermarket chain operator in terms of sales. The management of Mei Lian Mei expects the sales revenue for 2005 to be no less than RMB1.6bn and net profit to be no less than RMB33m. It is estimated that net profit in 2006 will maintain a growth rate of no less than 20%.

Dr Zhang Wenzhong, chairman and president of Wumart, said: "Mei Lian Mei is a well recognised retail business with fast growing momentum in the competitive market. From merchandise mix to store operation, it has presented its outstanding performance, which is achieved by an efficient management team and supported by loyal customers.

"In addition, this acquisition is in line with Wumart's regional development strategy, it helps Wumart maintain the momentum of rapid and steady growth in network expansion, keep up the growth of sales revenue and also sustain profitability. The collaboration with a company like Mei Lian Mei, which has an experienced management team and proven track record, will be one of the major models of Wumart's future expansion plan in order to cope with the intensifying competition."