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Two Shanghai retailers to merge via equity swap
By Ding Yining |
November 4, 2010, Thursday
|
Online Edition
Online Edition
SHANGHAI Friendship Group Inc said it has agreed to buy rival department store chain Shanghai Bailian Group through a share-swap deal valued at 16 billion yuan (US$2.4 billion).
Friendship will exchange 0.86 of its shares for each Shanghai Bailian's share, according to two separate statements from the companies to the Shanghai Stock Exchange today.
Shanghai Friendship will also buy 36 percent of Shanghai Nextage Department Store and 100 percent of Bailian Investment Group Co, an investment unit under Bailian Group's parent company.
Shanghai Bailian Group Co Ltd will become the new entity after the share swap and the completion of the transaction.
The new entity's business operations will cover both department stores and supermarket chains, which can also avoid horizontal competition.
"The merger with Bailian could make Friendship Group China's largest retailer and its whole year sales could climb to 45 billion yuan this year, while profit will be around 113 million yuan," China International Capital Corporation said in a research note.
"Shanghai is a key market in East Asia and Bailian has a promising outlook in the long term due to its large scale in the region," the report said.
Friendship will exchange 0.86 of its shares for each Shanghai Bailian's share, according to two separate statements from the companies to the Shanghai Stock Exchange today.
Shanghai Friendship will also buy 36 percent of Shanghai Nextage Department Store and 100 percent of Bailian Investment Group Co, an investment unit under Bailian Group's parent company.
Shanghai Bailian Group Co Ltd will become the new entity after the share swap and the completion of the transaction.
The new entity's business operations will cover both department stores and supermarket chains, which can also avoid horizontal competition.
"The merger with Bailian could make Friendship Group China's largest retailer and its whole year sales could climb to 45 billion yuan this year, while profit will be around 113 million yuan," China International Capital Corporation said in a research note.
"Shanghai is a key market in East Asia and Bailian has a promising outlook in the long term due to its large scale in the region," the report said.
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