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��Home>>China Observer
China's retail industry to see M&A booming
www.chinanews.cn 2006-04-11 17:39:51
Chinanews, April 11 - China's retail industry was recently buzzing with
the Mergers and Acquisitions (M&A) speculations .
Best Buy Co., the largest electronics retailer in the United States, is
bidding for Wuxing Electrical Appliance Co. and U.S.��s Home Depot, the
home-improvement retailer, is to acquire Orient Home Co. for 200 million
U.S. dollars, the Economy Reference reported Monday.
Previously, just around the time of the traditional Spring Festival in
late January this year, there have been a rumor going around that
Trust-mart, a Taiwanese-invested retail enterprises received buyout
offers from several international groups, involving Wal-Mart Stores Inc,
Carrefour SA, Tesco PLC and other international groups.
Although the biddings have not been comfirmed, the changing of foreign
investment strategy is certain, said the report.
The potential buyouts signal China��s retail industry entering a stage of
the M&A, the report cited a person related with retailer industry as
saying.
He said that China��s economy is turning towards consumption-driven path
and the A-share market has opened up to foreign investors this year and
all of these signal the coming of the new era of the M&A.
It was learned from the website of the National Bureau of Statistics
(NBS), in January and February of 2006, China's retail sales had amounted
to RMB 1.2644 trillion, up 12.5% from the corresponding period of last
year.
According to 2005-2006 Report on China's Circulation Industry Development
released by the Department of Market Operation Regulation of the Ministry
of Commerce (MOFCOM) and the Research Institute of Market Economy of the
Development Research Center (DRC) of the State Council, the indusdty
should pay attention to the M&A activites, a new trend showed by foreign
investors, with the commitment China has made to enter the World Trade
Organisationm (WTO) gradually fulfilled and the overall opening-up of
China��s circulation industry to foreign business.
The report also revealed that MOFCOM had approved a total of 24 M&A deals
in 2005.
��The country��s business land and sales channel are becoming scarce
resources for companies. The acquisition of domestic enterprises is an
effective way for foreign companies to enter China��s market and expand
,�� Guo Zhijun, Executive Vice Secretary of Research Institude of
China��s Business Culture said.
He said that many foreign-invested retailers were in the talks of
acquisition.
��Large-scale M&A to be launched in key SOEs
��Aggressive foreign M&A concern Chinese officials
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