Store chain deal sealed
Updated: 2007-11-28 10:14
Bright Dairy & Food Co Ltd, China's fourth-largest seller of milk products and a listed arm of Bright Food (Group) Co, has completed transfer of all of its 81 percent stakes in Shanghai Kedi Convenience Store.
Meanwhile, NongGongShang (NGS) Supermarket Group Co, also a member of Bright Food and owner of the competing Alldays convenience store chain, is now the nation's largest convenience store owner after paying 226.8 million yuan (US$30.65 million) for Kedi.
Bright Diary closed at 10.38 yuan, up 0.19 percent, at the Shanghai Securities Exchange yesterday, when the benchmark Shanghai Composite Index slumped nearly 2 percent to 4861.11 points.
The deal signals the first major restructuring of businesses in the same industry since its foundation last August, thus avoiding head-on competition between the two convenience store chains.
"With the integration of two similar businesses, Bright Food improved the corporate structure of the same businesses," Qi Xiaozhai, director of Shanghai Commercial Economic Research Center, said.
NSG could also expand the convenience store business by taking advantage of its vast supplying sources and integrating outsourcing, stocking and delivery, he added.
Kedi, with the remainder of its 19 percent owned by a real estate agency and its management, has more than 1,200 outlets in 21 cities within the Yangtze River Delta area.
Run under franchise and authorized chain, Kedi reported a net profit of 7.97 million yuan in the first half of this year.
NSG is set to become the biggest convenience store operator with 2,314 convenience shops in China and will gain an edge in Shanghai as its total outlets under the brands of Alldays and Kedi amount to 1,551. It will also seek to buy the remaining 19 percent in Kedi.
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