US firm Wal-Mart has agreed to acquire a Chinese retail chain for about $1 billion in a move that would give the world's largest retailer the biggest food and department store network in China, a source said today.
If approved by Chinese regulators, the deal to buy Trust-Mart, a closely held Taiwan company with 100 supercentres in China, would give Wal-Mart more Chinese superstores than French retailer Carrefour.
Wal-Mart beat Carrefour in bidding for the Trust-Mart stores, the Wall Street Journalreported.
Trust-Mart posted 2005 sales of about 12 billion yuan ($1.52 billion) at its Chinese hypermarkets, according to the China Chain Store and Franchise Association, well above Wal-Mart's 7.6 billion yuan in its Chinese stores.
By comparison, Carrefour had 2005 sales of 16.2 billion yuan at its Chinese hypermarkets.
Established in 1997, Trust-Mart employs more than 30,000 people at its hypermarkets in over 20 provinces across China, and says it offers nearly 20,000 different products in its stores.
Wal-Mart has made no secret of its ambitions in China. The retailer has said that its operations there could be as big as its US business in 20 years.
Wal-Mart has more than 3,700 US stores but only about 60 in China.
In March, the retailer said it planned to hire some 150,000 people in China over the next five years - five times the number it currently employs - as it prepares for a major store expansion.
In recent weeks, the state-controlled All-China Federation of Trade Unions has organised workers at all of Wal-Mart's China stores.
International expansion has become increasingly important for Wal-Mart as its US sales growth slows. Its US discount stores posted 7.9 per cent sales growth for September, while the international business turned in a strong 32 per cent gain.
Shares of Wal-Mart closed yesterday down 14 cents, or 0.29 per cent, at $48.32.