Wal-Mart Considers Japan Takeovers

Shares in Wal-Mart's Japanese subsidiary, Seiyu Limited, surged 13 percent Monday after expansion talk by a top Wal-Mart executive.

Wal-Mart Vice Chairman Michael Duke told Japan's Nikkei business daily that the company is looking for takeover opportunities in Japan. Duke says Wal-Mart welcomes Japanese deregulation that is to take effect in May. The rule changes will allow foreign companies to buy out domestic firms through stock-swaps with local subsidiaries.

The changes would allow Wal-Mart more leverage in local takeovers through Seiyu, which is majority owned by Bentonville-based Wal-Mart.

Since arriving in Japan in 2002, Wal-Mart has been gradually raising its stake in Seiyu, which is Japan's fifth-largest chain with more than 400 stores.

But Seiyu has been losing money and struggling to win over Japanese shoppers, who are renowned for being fickle. As part of its drive to overhaul its business, Seiyu rolled out plans to remodel 65 stores. (See link for more on Seiyu.)