Wumart Stores and C.P. Lotus end merger attempt
A proposed $745 million tie-up between the Chinese supermarket operator Wumart Stores and C.P. Lotus…A proposed $745 million tie-up between the Chinese supermarket operator Wumart Stores and C.P. Lotus, a retailer in China controlled by the Thai billionaire Dhanin Chearavanont, has fallen apart after the two sides failed to agree on final terms of the deal, both companies said Monday.
‘‘Despite extensive negotiations in good faith, C.P. Lotus and Wumart were not able to make sufficient progress in reaching agreement on certain key terms for the proposed transactions,’’ Mr. Dhanin’s company said Monday in a stock exchange announcement.
Announcing the plans in October, Wumart had said the deal would give it ‘‘an immediate entry into important geographic regions such as eastern China, consistent with Wumart’s strategy. The established network and premium locations of the acquired stores would otherwise be difficult to build organically.’’
Supermarket sales in China last year were 1.8 trillion renminbi, or nearly $300 billion (USD), up 10 percent from 2011, according to figures from Euromonitor International, a global research company. Sales are forecast to rise 25 percent by 2015. Yet the sector remains highly fragmented, with no supermarket chain capturing more than 5 percent of the country’s market.
Shares in Wumart fell on news that the deal was scrapped, and were down 5.8 percent at the noon trading break in Hong Kong. Shares in C.P. Lotus were down 3.8 percent.