The world’s largest retailer Walmart is considering making a bid for the Hong Kong supermarket business of Asia's richest man Li Ka-shing. Walmart may use Hong Kong’s second biggest ParknShop chain as a platform to expand in the country.
Walmart is working with a bank weighing its options for a $4bn
takeover of ParknShop ahead of the bid deadline on August 16,
Reuters quotes sources. Private equity firms such as KKR,
TPG Capital, and Blackstone are also invited to bid. Japan's
Aeon, China Resources Enterprise Ltd, Sun Art Retail, and
Australian retailers Wesfarmers and Woolworths Ltd are also among
possible bidders, Reuters previously reported.
ParknShop operates 345 stores in Hong Kong, mainland China and
Macau, and earned $2.8bn in revenue last year, according to
Reuters. Its purchase will offer an opportunity to operate in a
market dominated by two large players Li’s ParknShop (33.1
percent share) and Singapore's Dairy Farm International (39.8
percent), Euromonitor data says.
A Walmart purchase would help put its roots further down into
Chinese soil. It opened the first China store in 1996 and now
operates over 380 stores, including Supercenters, Sam's Clubs and
Neighborhood Markets. Last year the company announced plans
to open 100 new stores in China over the next three years and
create 18,000 jobs.
It is also in line with the retail giant's strategy to expand its
presence in rapidly developing emerging markets. Last year
Walmart was reportedly in talks to buy an 80% stake in Turkish
retailer Migros Ticaret, according to Reuters.
Walmart spent more than five years in Russia with a
team of 30 plotting an entry strategy. However its first attempt
to enter the Russian market failed: its Moscow office was closed
in February 2011 after the failed purchase of one of the leading
hypermarkets Lenta and discounter Pyaterochka, business daily