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TOKYO, Japan -- U.S. retailing giant Wal-Mart Stores is to pay 52.06 billion yen ($421 million) to take control of Japanese supermarket chain Seiyu Ltd.
Seiyu said Thursday Wal-Mart will buy 192.8 million new shares at 270 yen each to take its stake from 6.1 percent to 33.4 percent, Reuters news agency reported.
The new shares will be issued on December 27 to Wal-Mart, the world's biggest retailer.
It would be the first time for a major Japanese chain to be controlled by an overseas retailer.
The Nihon Keizai Shimbun reported Wal-Mart will use Seiyu group's 400 stores to introduce a low-price strategy, taking advantage of its massive global purchasing power.
Wal-Mart is expected to source some of its goods from its production bases in China.
Equity warrants
Wal-Mart formed a comprehensive business tie-up with Seiyu in March, and in May obtained equity warrants to purchase Seiyu gradually.
These warrants allow Wal-Mart to increase its stake to 33.4 percent at the end of this year, to 50.1 percent by the end of 2005 and to 66.7 percent by the end of 2007.
According to the Nikkei, Wal-Mart has established a feasibility study team, including key Seiyu shareholder Sumitomo Corp. to look at conducting business in Japan.
Wal-Mart believes Seiyu stores can improve earnings by investing money in remodeling and improving management.
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