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(Reuters) - Costco Wholesale Corp (COST.O) said it would buy the remaining 50 percent stake in its Mexican unit from joint venture partner Comercial Mexicana COMEUBC.MX for 10.7 billion pesos ($766.79 million).
Costco Mexico, which is operated by Costco Wholesale, will pay a cash dividend of about 4.8 billion pesos ($343.98 million), to be split equally between Costco and Comerci, as the Mexican retailer is locally known.
Costco will use the dividend to fund the purchase, while the Mexican company plans to use the proceeds to pay down debt.
The Costco-Comerci relationship dates back to the early 1990s when Costco merged with Price Co, with which Comerci had a joint venture partnership.
Comerci executives who serve on Costco Mexico's board will continue to do so, the companies said in a statement on Thursday.
Issaquah, Washington-based Costco, the largest warehouse club operator, operates 32 outlets in Mexico.
Reporting by A. Ananthalakshmi in Bangalore; Editing by Viraj Nair