June 17, 2009 / 10:08 PM / 10 years ago

UPDATE 1-Japan's Laox in talks to sell stake to Suning - Nikkei

June 18 (Reuters) - Struggling consumer electronics retailer Laox Co (8202.T) is holding discussions with Chinese retail chain operator Suning Appliance Co on an equity deal that will make it the first big Japanese retailer to become a Chinese company’s affiliate, The Nikkei business daily said.

Under the plan, Laox would issue roughly 1.5 billion yen ($15.6 million) in shares representing a more than 50 percent stake to a Japanese firm that has been acting as a go-between, the daily reported without citing sources.

Suning would then take an interest of around 30 percent to become Laox’s principal shareholder with board representation, the report added.

Suning apparently is hoping to learn business practices, such as pricing policies and customer services, from Laox, and use the expertise gleaned from operating in the highly competitive Japanese consumer electronics retail market to fuel further business growth, The Nikkei said.

If they reach an agreement, an announcement will likely be made sometime next week, Nikkei said in its report.

After posting a ninth consecutive year of net losses last fiscal year, Laox has started a business restructuring to reduce its store network from 67 nationwide last spring to just nine in such locations as Tokyo’s Akihabara district. ($1=96.31 Yen) (Reporting by Bijoy Koyitty in Bangalore; Editing by Gopakumar Warrier)

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