Sat, Mar 07, 2015 - Page 15 News List

FamilyMart, Uny consider merger of Japanese business

Bloomberg

FamilyMart Co and Uny Group Holdings Co are in merger talks that might create Japan’s second-largest convenience store chain by sales, as operators seek cost savings.

Uny is considering options including mergers with other companies, and no decision has been made, the company said in a statement to the Tokyo Stock Exchange. FamilyMart also confirmed in a statement that it is in talks with Uny, which has a market value of about ¥169 billion (US$1.41 billion).

FamilyMart is competing against Seven & I Holdings Co’s 7-Eleven chain — Japan’s largest convenience store network, and No. 2 Lawson Inc in a race to keep prices down by raising volume. Japan’s convenience stores are luring customers from supermarkets and fast-food restaurants by selling hot meals and competitively priced staples and offering services such as parcel delivery pickup and bill payments.

“The merger would give both FamilyMart and Uny greater economies of scale,” JPMorgan Securities Japan Co analyst Dairo Murata said by telephone.

The deal might also increase expectations for further convenience store market consolidation, he said.

FamilyMart chief executive officer Junji Ueda yesterday said he does not plan to spend too much time before reaching an agreement with Uny, Japanese public broadcaster NHK reported.

Uny shares surged 11 percent, the biggest intraday gain since 2008, to ¥742, before trading at ¥724 at 11:30am yesterday in Tokyo. FamilyMart shares fell 2.9 percent.

Itochu Corp owns 36 percent of FamilyMart and about 3 percent of Uny, according to data compiled by Bloomberg.

Uny’s Circle K and Sunkus chains had 6,328 stores in Japan as of January, compared with FamilyMart’s 11,271 and Seven & I’s 17,491, according to the companies’ Web sites. Lawson has about 12,000 stores in the nation, data compiled by Bloomberg show.

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