CP Lotus fails to sell outlets to Wumart
China's supermarket chain Wumart Stores Monday cancelled the deal to buy 36 outlets from CP Lotus, a partially-owned business unit of Thailand's billionaire Dhanin Chearvanont.
Under the deal announced in October, Wumart planned to buy a roughly 10 per cent stake in CP Lotus for HK$547.9 million, while CP Lotus planned to buy a nearly 14 per cent stake in Wumart for HK$2.89 billion. Under this deal, Wumart would gain control of 36 stores of CP Lotus.
According Wall Street Journal, the failed deal would have consolidated China's fragmented retail grocery market. Wumart has a 1.8 per cent share of hypermarket sales in China and a 0.3 per cent share of supermarket sales, according to market-research firm Euromonitor International. Hypermarkets are large stores that sell household goods and clothing in addition to food. Top hypermarket Sun Art Retail Group Ltd. 6808.HK holds a 14 per cent market share, while leading supermarket operator China Resources holds a 2 per cent share, according to Euromonitor.
