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Japan Retailer Could Become No. 1 in Asia

Japan Retailer Could Become No. 1 in Asia
By REUTERS
Published: December 27, 2005

TOKYO, Dec. 26 (Reuters) - Seven & I Holdings Company, the Japanese retailer, said on Monday that it would take over Millennium Retailing, the Japanese department store group, in a deal worth as much as $2.15 billion.

Seven & I, a holding company that includes the Ito-Yokado supermarket chain and Seven-Eleven Japan convenience stores, aims to become globally competitive through the deal, which will push it past the Aeon Company and make it Asia's top retailing group by sales.

The company, which also has 7-Eleven under its umbrella, hopes to jump-start its growth with department stores, which have been benefiting from improvement in Japan's economy, while the outlook for general merchandise and convenience stores remains gloomy because of market saturation.

Seven & I's move also coincides with attempts by foreign rivals to gain further footholds in Japan's already crowded retailing sector. Competition intensified this month when Wal-Mart Stores, the world's largest retailer, took a controlling stake in Seiyu Ltd., the country's fourth-biggest supermarket chain.

The chairman of Seven & I, Toshifumi Suzuki, said on Monday at a news conference that the company wanted to create a new retailing model through the merger.

Mr. Suzuki said he was confident that the president of Millennium, Shigeaki Wada, would be able to differentiate his company from other department stores, something that was needed to win in a saturated retailing market. Mr. Wada will become a vice president at Seven & I in May.

Seven & I said it would pay 131.1 billion yen ($1.13 billion) in cash for a 65.45 percent stake in privately held Millennium from Nomura Principal Finance, a unit of Nomura Holdings, in January.

It plans to acquire the remaining shares with cash or stock by next June to make Millennium, the parent company of Japan's Seibu and Sogo department stores, wholly owned.


LINK: http://www.nytimes.com/2005/12/27/business/worldbusiness/27yen.html