Wal-Mart Is Set to Make a Seiyu Wholly Owned Unit


Wal-Mart Stores is in final talks to buy out minority shareholders in its Japanese unit Seiyu, local media said on Monday, in an effort to turn around the struggling business.

The move would cost the U.S. firm about $350 million based on Seiyu's closing price on Friday of 87 yen.

Wal-Mart , which currently holds 50.9 percent of Seiyu, will buy the remaining stake it does not already own, public broadcaster NHK and Kyodo news agency said, citing unnamed sources.

A spokesman for Seiyu declined to comment. The Tokyo Stock Exchange suspended trade in the stock following the reports.

Separately, the Nikkei business daily said Seiyu will announce as early as Monday Wal-Mart's plan to make it a wholly owned subsidiary.

The world's largest retailer has invested more than $1 billion in Seiyu since 2002, but has yet to see anything more than temporary upswings in sales amid tough competition with rivals such as Aeon.

Seiyu is headed for its sixth straight annual loss in 2007, which has caused speculation that Wal-Mart could consider pulling out Japan, as it did from South Korea and Germany last year.

Cracking Japan's retail market, the world's second-largest, has proved a challenge for foreign companies, due in part to fickle shopping habits and tough competition.

In recent years France's Carrefour and Britian's Alliance Boots have both been pulled out of the market.

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