Wal-Mart is buying a 35 percent stake in a company that operates Trust-Mart (
Wal-Mart may eventually take managerial control of Taiwan-based Bounteous Co (好又多商業發展公司), which operates 101 Trust-Mart stores in 34 major cities in China, the US retail giant said in a statement Tuesday.
Financial details of the deal were not disclosed. Newspapers last year speculated a takeover of Trust-Mart would cost Wal-Mart about US$1 billion.
The acquisition, if expanded as planned, would vault Wal-Mart past its rival, Carrefour SA of France, in the number of hypermarkets -- giant stores selling discounted food and household goods -- in China.
Foreign retailers are rushing to tap China's fast-growing economy, large population and expanding middle class.
"Through this investment in Trust-Mart we have the opportunity to expand our presence in China, one of the world's fastest growing retail markets," Wal-Mart vice chairman Michael Duke said in the statement.
"This is an important step in bringing additional scale to our China retail business and enabling us to do what we do best -- serving our customers with improved service, high quality and innovative products, and lower prices," he said.
The statement said Trust-Mart stores, at least initially, would continue to operate under their own brand name.
Bentonville, Arkansas-based Wal-Mart has been seeking international expansion to make up for slowing growth in the US, but it has had mixed success overseas. It pulled out of loss-making operations in South Korea and Germany last year but is seeking growth in Central and South America, China and India. It is also eyeing a possible entry into Russia.
The company's total international division accounted for about 20 percent of its overall net sales of US$312.4 billion in 2005.
Wal-Mart is one of China's biggest and most prominent foreign employers, with a work force of 37,000 and 68 stores. Working with Wal-Mart will allow Trust-Mart's suppliers to further expand sales in China, said Trust-Mart chairman John Yu (
Trust-Mart was founded in the mid-1990s by Taiwan tycoon Winston Wong (
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