US giant Wal-Mart Stores, the world's largest discount store chain, will sell its South Korean business to local retail group Shinsegae for 825 billion won (US$874 million), officials said yesterday.
Shinsegae, which operates discount chain E-Mart as well as department stores, said it would buy all 16 outlets run by Wal-Mart in South Korea in a bid to expand its discount store business.
Under the deal, the stores will be absorbed by E-Mart and operate under the E-Mart brand name. The US chain has invested 812 billion won since it opened its first store in South Korea in 1998.
The deal, which requires government approval, came a month after French retail giant Carrefour sold its Korean unit to local clothing-maker and distribution group Eland for US$1.9 billion.
Shinsegae's stock rose 6.6 percent to 460,000 won as investors cheered its expansion drive while rival Lotte Shopping fell 4.6 percent to 17,500 won while the overall market was down 2.46 percent.
The retail firm is a part of the Samsung Group, South Korea's biggest conglomerate.
E-Mart said the deal would consolidate its leading position in the crowded domestic market where competition has forced the exit of foreign rivals.
As a result, E-Mart will increase the number of outlets to 102 including seven in China. E-Mart will absorb all 3,356 Korean workers hired by Wal-Mart.
"With the acquisition of Wal-Mart stores, we will secure the ground for our stable business at home. This will also help us step up our operations in China," Shinsegae president Koo Hak-seo told reporters.
E-Mart currently accounts for 34 percent of South Korea's discount store market.
Lotte Mart, a unit of Lotte Shopping, was second with 19 percent, followed by Samung Tesco Homeplus, a joint venture between Samsung Group and Britain's Tesco Plc and E-Mart, with 14 percent.
Homeplus overtook Carrefour as the country's third-largest discount store chain in 2003.
Wal-Mart entered South Korea in 1998, but its business here has been sluggish, posting a net loss of 9.9 billion won last year. Its market share last year stood at four percent.
Announcing its withdrawal earlier this year, Carrefour said it would shift its focus to China after 10 years of lackluster performance in South Korea.
After opening its first store in 1996, Carrefour Korea has invested some 1.5 trillion won over the past 10 years but had never managed to make real headway against its local rivals.
Wal-Mart also attributed its withdrawl from South Korea to competition and poor sales but vowed to maintain its procurement unit here for global sourcing.
The exit of Wal-Mart and Carrefour, the world's first and second largest retail groups, comes amid growing anti-foreign sentiment stirred by big profits some foreign investors have realized in recent years.
But Chung Sye-kyun, minister of commerce industry and energy, said South Korea welcomed foreign investment and was streamlining investment procedures in a bid to attract more.
INVESTIGATION: The case is the latest instance of a DPP figure being implicated in an espionage network accused of allegedly leaking information to Chinese intelligence Democratic Progressive Party (DPP) member Ho Jen-chieh (何仁傑) was detained and held incommunicado yesterday on suspicion of spying for China during his tenure as assistant to then-minister of foreign affairs Joseph Wu (吳釗燮). The Taipei District Prosecutors’ Office said Ho was implicated during its investigation into alleged spying activities by former Presidential Office consultant Wu Shang-yu (吳尚雨). Prosecutors said there is reason to believe Ho breached the National Security Act (國家安全法) by leaking classified Ministry of Foreign Affairs information to Chinese intelligence. Following interrogation, prosecutors petitioned the Taipei District Court to detain Ho, citing concerns over potential collusion or tampering of evidence. The
‘FORM OF PROTEST’: The German Institute Taipei said it was ‘shocked’ to see Nazi symbolism used in connection with political aims as it condemned the incident Sung Chien-liang (宋建樑), who led efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), was released on bail of NT$80,000 yesterday amid an outcry over a Nazi armband he wore to questioning the night before. Sung arrived at the New Taipei City District Prosecutors’ Office for questioning in a recall petition forgery case on Tuesday night wearing a red armband bearing a swastika, carrying a copy of Adolf Hitler’s Mein Kampf and giving a Nazi salute. Sung left the building at 1:15am without the armband and apparently covering the book with a coat. This is a serious international scandal and Chinese
Seventy percent of middle and elementary schools now conduct English classes entirely in English, the Ministry of Education said, as it encourages schools nationwide to adopt this practice Minister of Education (MOE) Cheng Ying-yao (鄭英耀) is scheduled to present a report on the government’s bilingual education policy to the Legislative Yuan’s Education and Culture Committee today. The report would outline strategies aimed at expanding access to education, reducing regional disparities and improving talent cultivation. Implementation of bilingual education policies has varied across local governments, occasionally drawing public criticism. For example, some schools have required teachers of non-English subjects to pass English proficiency
TRADE: The premier pledged safeguards on ‘Made in Taiwan’ labeling, anti-dumping measures and stricter export controls to strengthen its position in trade talks Products labeled “made in Taiwan” must be genuinely made in Taiwan, Premier Cho Jung-tai (卓榮泰) said yesterday, vowing to enforce strict safeguards against “origin laundering” and initiate anti-dumping investigations to prevent China dumping its products in Taiwan. Cho made the remarks in a discussion session with representatives from industries in Kaohsiung. In response to the US government’s recent announcement of “reciprocal” tariffs on its trading partners, President William Lai (賴清德) and Cho last week began a series of consultations with industry leaders nationwide to gather feedback and address concerns. Taiwanese and US officials held a videoconference on Friday evening to discuss the
RSS