US giant Wal-Mart Stores, the world's largest discount store chain, will sell its South Korean business to local retail group Shinsegae for 825 billion won (US$874 million), officials said yesterday.
Shinsegae, which operates discount chain E-Mart as well as department stores, said it would buy all 16 outlets run by Wal-Mart in South Korea in a bid to expand its discount store business.
Under the deal, the stores will be absorbed by E-Mart and operate under the E-Mart brand name. The US chain has invested 812 billion won since it opened its first store in South Korea in 1998.
The deal, which requires government approval, came a month after French retail giant Carrefour sold its Korean unit to local clothing-maker and distribution group Eland for US$1.9 billion.
Shinsegae's stock rose 6.6 percent to 460,000 won as investors cheered its expansion drive while rival Lotte Shopping fell 4.6 percent to 17,500 won while the overall market was down 2.46 percent.
The retail firm is a part of the Samsung Group, South Korea's biggest conglomerate.
E-Mart said the deal would consolidate its leading position in the crowded domestic market where competition has forced the exit of foreign rivals.
As a result, E-Mart will increase the number of outlets to 102 including seven in China. E-Mart will absorb all 3,356 Korean workers hired by Wal-Mart.
"With the acquisition of Wal-Mart stores, we will secure the ground for our stable business at home. This will also help us step up our operations in China," Shinsegae president Koo Hak-seo told reporters.
E-Mart currently accounts for 34 percent of South Korea's discount store market.
Lotte Mart, a unit of Lotte Shopping, was second with 19 percent, followed by Samung Tesco Homeplus, a joint venture between Samsung Group and Britain's Tesco Plc and E-Mart, with 14 percent.
Homeplus overtook Carrefour as the country's third-largest discount store chain in 2003.
Wal-Mart entered South Korea in 1998, but its business here has been sluggish, posting a net loss of 9.9 billion won last year. Its market share last year stood at four percent.
Announcing its withdrawal earlier this year, Carrefour said it would shift its focus to China after 10 years of lackluster performance in South Korea.
After opening its first store in 1996, Carrefour Korea has invested some 1.5 trillion won over the past 10 years but had never managed to make real headway against its local rivals.
Wal-Mart also attributed its withdrawl from South Korea to competition and poor sales but vowed to maintain its procurement unit here for global sourcing.
The exit of Wal-Mart and Carrefour, the world's first and second largest retail groups, comes amid growing anti-foreign sentiment stirred by big profits some foreign investors have realized in recent years.
But Chung Sye-kyun, minister of commerce industry and energy, said South Korea welcomed foreign investment and was streamlining investment procedures in a bid to attract more.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a