SEOUL, May 22: Wal-Mart Stores Inc. has agreed to the sale of its South Korean outlets to local retailer Shinsegae Co. Ltd. for $882 million, making it the second global retailer to exit the country in a month.
Both companies said in a statement on Monday they had agreed to the South Korean retailer buying a 100 percent stake in the U.S. company's 16 domestic outlets for 825 billion won. Shinsegae will operate the stores under its E-Mart retail store brand.
French retail giant Carrefour sold in late April its 32 South Korean stores to a local fashion retailer E-Land Ltd. in a $1.85 billion deal to focus on China.
Carrefour sold out of the country's discount store market so that it could concentrate resources on China's $240 billion retail industry, Asia's largest retail market after Japan.
''As we continue to focus our efforts where we can have the greatest impact on our growth strategy, it became increasingly clear that in South Korea's current environment it would be difficult for us to reach the scale we desired,'' Mike Duke, vice-chairman of Wal-Mart, said in a statement.
Shinsegae is South Korea's biggest discount store chain operator, with 79 E-Mart stores nationwide. It lost out in the bid for Carrefour's South Korean stores.
Shares in Shinsegae, which also operates major department store chains, jumped 5.68 percent to 456,000 won by 0514 GMT following the news, against the KOSPI's 1.73 percent drop.
Analysts say the purchase will give Shinsegae a firm lead over its rivals. Shinsegae competes with Lotte Shopping Co. and Britain's Tesco Plc. in the discount store market in South Korea, which has Asia's fourth-largest economy.
REUTERS
Both companies said in a statement on Monday they had agreed to the South Korean retailer buying a 100 percent stake in the U.S. company's 16 domestic outlets for 825 billion won. Shinsegae will operate the stores under its E-Mart retail store brand.
French retail giant Carrefour sold in late April its 32 South Korean stores to a local fashion retailer E-Land Ltd. in a $1.85 billion deal to focus on China.
Carrefour sold out of the country's discount store market so that it could concentrate resources on China's $240 billion retail industry, Asia's largest retail market after Japan.
''As we continue to focus our efforts where we can have the greatest impact on our growth strategy, it became increasingly clear that in South Korea's current environment it would be difficult for us to reach the scale we desired,'' Mike Duke, vice-chairman of Wal-Mart, said in a statement.
Shinsegae is South Korea's biggest discount store chain operator, with 79 E-Mart stores nationwide. It lost out in the bid for Carrefour's South Korean stores.
Shares in Shinsegae, which also operates major department store chains, jumped 5.68 percent to 456,000 won by 0514 GMT following the news, against the KOSPI's 1.73 percent drop.
Analysts say the purchase will give Shinsegae a firm lead over its rivals. Shinsegae competes with Lotte Shopping Co. and Britain's Tesco Plc. in the discount store market in South Korea, which has Asia's fourth-largest economy.
REUTERS
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