December 5, 2007 / 6:17 AM / in 11 years

Wal-Mart seals $849 mln buyout of Japan's Seiyu

TOKYO (Reuters) - Wal-Mart Stores Inc. (WMT.N) said on Wednesday it had completed an $849 million bid to buy out minority shareholders in loss-making supermarket chain Seiyu Ltd. 8268.T, raising its bet on the Japanese market.

A view of the Wal-Mart store in Broomfield, Colorado June 7, 2007. REUTERS/Rick Wilking

The world’s largest retailer launched a tender offer for shares in Seiyu in late October, aiming to buy the roughly 49 percent it did not already own in the firm. The offer closed on December 4.

Wal-Mart said it had secured enough shares to raise its stake in terms of common stock to 95.1 percent from 50.9 percent. In terms of voting rights, the number of shares tendered would boost its interest to 97.77 percent.

It had targeted a minimum of two-thirds.

Wal-Mart said it would cost 93.4 billion yen ($849 million) to buy the common and preferred shares tendered when settlement is made on December 11. It will also take steps to acquire the remaining shares and delist Seiyu from the Tokyo Stock Exchange.

It was widely expected that Wal-Mart would succeed in its bid as it offered 140 yen per Seiyu share, a premium of 61 percent to the market price on October 21 when the deal was announced.

Wal-Mart has already invested more than $1 billion in Seiyu since 2002 but has yet to see anything more than temporary upswings in sales amid tough competition with rivals such as Aeon Co. (8267.T).

Seiyu is headed for its sixth straight annual loss in 2007, and the buyout put an end to speculation that Wal-Mart might pull out of Japan, as it did from South Korea and Germany last year.

Cracking Japan’s retail market has proved a challenge for foreign companies, many of which have failed to cater to local tastes and offer an attractive enough alternative to the market’s entrenched players.

In recent years France’s Carrefour (CARR.PA) and Britain’s Alliance Boots AB.UL have both pulled out of the world’s second-largest retail market.

Shares of Seiyu have lost more than half of their value since the end of 2002, the year when Wal-Mart first bought into the supermarket.

Before the announcement, shares in Seiyu closed up 3 percent at 137 yen.

Reporting by Nathan Layne; Editing by Hugh Lawson

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