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Korea M&A Corporation
Shinsegae Takes Over Wal-Mart 본문
Shinsegae Takes Over Wal-Mart
Wal-Mart Stores Inc, the
Afterward, Wal-Mart and Shinsegae Co., the South Korean retail giant, held an urgent press conference at the Chosun Hotel on May 22.
Shinsegae Co. had announced that they have come to an agreement to take over entire Wal-Mart Korea's equity. The takeover price amounted to 825 billion won, equivalent to roughly $882 million.
Shinsegae Co. will alter the names of the 16 Wal-Mart stores to become E-marts and begin new practices.
"We have been negotiating with Wal-Mart along with the takeover of Carrefour Korea Ltd. simultaneously. We finalized our negotiation two weeks ago in Japan. Since Wal-Mart places great emphasis on the merit and post compensation system to the employees, rather than the price, Shinsegae Co. has implemented the negotiation, single-handedly," said Koo Hak-suh, president of Shinsegae Co.
The total takeover price will be supplied as holding capital of Shinsegae Co. "The takeover price had been decided by considering the fact that all 16 stores of Wal-Mart are self-run businesses. Even if we borrow the total sum of the takeover price from a bank, the debt rate only amounts to 170 percent, which could be amortized within two to three years, since we've been investing one trillion won annually," he added.
But, when Wal-Mart was asked about the purpose of proceeds from sale, they've shunned away from giving detailed answers by stating that headquarters will be deciding upon a statement.
Shinsegae Co. will recruit all 3,356 Wal-Mart employees and find ways to use the employees who have submitted their resignation forms.
As Wal-Mart withdrew from the Korean market following Carrefour, the domestic retail market has become an unwanted place for the foreign retailers.
The biggest factor of failure for foreign retailers was dull sales performance due to an alleged lack of localization strategies. Wal-Mart, which began its business in Korea after it took over Makro Korea in 1998, had recorded 728.7 billion won in sales and a 9.9 billion won loss.
[Bo-yung Kim / CJB]
reference : http://www.mk.co.kr/