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Lianhua supermarkets on the march

THE Chinese supermarket chain operator Lianhua Supermarket Holdings said late yesterday it has agreed to buy Hualian Supermarket to expand its presence in the Yangtze River Delta region.

Lianhua said it would buy 99.4 percent of the shares in Hualian from its parent Bailian Group for 488.8 million yuan while Lianhua Supermarket Development, a subsidiary of Lianhua, would take the rest for 2.9 million yuan, Lianhua said in a statement filed to Hong Kong Stock Exchange.

Analysts said the merger indicated Bailian is set to reconstruct its supermarket chain business and Lianhua would gain substantial advantages in market competition on completion of the deal.

"The company's market share in the Yangtze River Delta region, especially the Shanghai region, will further expand. And it will experience substantial growth in the franchise business in Zhejiang Province and Jiangsu Province," Lianhua said in the statement. "It will also strengthen bargaining power when negotiating with its suppliers."

Lianhua, the largest supermarket chain operator in China, will have 5,268 stores across the nation, mainly in the Yangtze River Delta region, on completion of the deal. Hualian's strong presence in the delta region would help Lianhua to gain dominance in the area, especially in Shanghai, in line with Lianhua's market strategy to focus on eastern China.


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