Thu, May 17, 2018 - Page 12 News List

Sumitomo to increase its stake in Simple Mart

Staff writer

Mercuries & Associates Holding Ltd (三商投資控股) has reached an agreement with Japan’s Sumitomo Corp to jointly operate its retail business in Taiwan.

The Taiwanese company plans to sell 6.81 million shares in its local retail unit, Simple Mart Retail Co (三商家購), to the Tokyo-based trading house for NT$743 million (US$24.86 million), or NT$109.1 per share, Mercuries & Associates said in a filing with the Taiwan Stock Exchange on Friday last week.

Sumitomo is to buy 5,000 new Simple Mart shares at NT$100 each in a separate recapitalization deal to increase its stake in the Taiwanese retailer, Mercuries & Associates said.

Simple Mart, founded in 2006, operates supermarket chain Simple Mart (美廉社), whose mainstay products include beverages, processed foods and daily necessities. The chain had 627 stores as of April 30, mostly in northern Taiwan.

Mercuries & Associates said it expects the share sale to Sumitomo to help “strengthen Simple Mart’s operating efficiency and profitability” by making use of the new investor’s knowledge and know-how from its retail businesses in Japan.

“The deal is also expected to benefit Mercuries & Associates’ long-term development,” it added.

Mercuries & Associates holds 38.297 million shares, or 71.49 percent, in Simple Mart Retail.

The company plans to complete the transaction with Sumitomo by Aug. 31, the filing said.

The Japanese firm confirmed the partnership in a statement on Monday.

“Sumitomo Corp will acquire a stake in Simple Mart Retail Co Ltd from Mercuries & Associates and convert it into an equity-method affiliate,” it said on its Web site.

Sumitomo, whose retail businesses include the Tomod’s Inc drugstore chain and the Summit supermarket chain, said that it aims to address user needs in a more tailored fashion by having Simple Mart carry more Japanese-made products and by using data analysis to create customer-oriented sales points.

Sumitomo said it and Mercuries & Associates have since 2012 jointly run the Tomod’s drugstore chain in Taiwan, which had 38 stores as of April 30.

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