Sale of RT-Mart to PX Mart could worry Carrefour: analyst
A deal with Taiwanese operator of supermarket chain PX Mart Co Ltd (全 聯 實業) to acquire RT-Mart International Ltd (大 潤發) could pose significant challenges for Carrefour Taiwan (家樂福), as the acquisition would help PX Mart to expand its reach to the corporate hypermarket, according to a research economist.
“The acquisition agreement is expected to boost competition in Taiwan’s hypermarket industry,” said Commerce Development Research Institute deputy general manager Li Shyh-jane (李世珍). “It is possible that Carrefour is getting nervous.
On Friday night, PX Mart surprised the local retail industry by announcing the deal, which is expected to be finalized in the middle of next year.
Photo courtesy of PX Mart Co Ltd
In a statement, PX Mart announced its intention to acquire RT-Mart from French retailer Auchan Retail International SA and Taiwanese conglomerate Ruentex Group (潤泰 集團).
The deal covers buildings and land owned by RT-Mart, in addition to distribution rights and the self-developed RT-Mart brand, the statement said, adding that the deal is pending regulatory approval.
“RT-Mart is ahead of Carrefour in service technological innovations,” said Li, referring to RT-Mart’s digital payment applications, which have added to the convenience of shopping.
PX Mart uses its PXPay digital payment app to consolidate online and offline customer bases to record customers’ buying habits, Li said.
“Once PX Mart and RT-Mart integrate their digital assets, the combination could be extraordinary,” he added.
Li said the deal is expected to create synergy for PX Mart.
“PX Mart and RT-Mart are complementary and each has a different customer base,” Li said. “The combination should help PX Mart expand its customer base. “
However, it takes time to observe whether the process of integrating the two companies can go smoothly, he added.
Founded in 1998, PX Mart operates Taiwan’s largest supermarket chain with 1,056 outlets nationwide, and plans to increase that number to 1,100 this year. Sales for this year are expected to total NT $ 150 billion (US $ 5.38 billion) this year, he said.
Earlier this year, PX Mart opened a 4000 ping (13,200 m2) flagship store in the Nangang district of Taipei (南港), moving closer to a goal of managing department stores.
RT-Mart has 22 outlets in Taiwan, making it the second largest hypermarket chain in Taiwan after Carrefour.
After the acquisition of Wellcome Taiwan Co Ltd (惠康 百貨), as well as the Taiwanese supermarkets Wellcome and Jasons Market Place, Carrefour has a total of 354 outlets across the country with sales likely to reach $ 90 billion NT this year.
PX Mart did not provide financial details of the acquisition, but Ruentex group subsidiaries Ruentex Development Co (潤泰 新) and Ruentex Industries Ltd (潤泰 全) said in a statement on Friday that they were selling their stakes. in RT-Mart for NT. $ 1.303 billion each.
The subsidiaries said they expected to record NT $ 1.175 billion and NT $ 1.151 billion in gains, respectively, on the sale.
They said RT-Mart’s book value per share is NT $ 25.48.
Industry sources said the acquisition review could exceed NT $ 13 billion.
In an internal letter to RT-Mart employees, Auchan chairman Edgard Bonte said the deal was part of his group’s overall strategy, which was adjusted in March last year to divest its “non-strategic” assets.
Auchan withdrew from the Chinese market last October.
Bonte praised PX Mart as a knowledgeable and professional retail operator, saying he was confident the new owner could improve RT-Mart’s competitive edge.
After the acquisition, Auchan, which currently has a stake of around 65% in RT-Mart, is expected to pull out of the Asian market, analysts said.
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