Japanese retailer FamilyMart Uny to buy 20% in rival Don Quijote for $1.9b

A customer exits a FamilyMart Co. convenience store at dusk in Tokyo, Japan. Photographer: Kiyoshi Ota/Bloomberg

Japanese retailer FamilyMart Uny Holdings Co said it had offered to buy a 20 percent stake in rival Don Quijote Holdings Co for $1.9 billion, as the two companies try to weather a rapidly changing competitive landscape.

The move came as traditional retailers such as big-box general merchandising chains and department stores struggle to stay competitive against fast-growing online and speciality players.

Don Quijote shares jumped 7 percent, while FamilyMart Uny fell 5 percent in morning trade, following the announcement.

FamilyMart Uny would make a tender offer to buy 20.17 percent of Don Quijote for 6,600 yen a share for a total 211.9 billion yen ($1.9 billion), the two companies said in filings with the stock exchange.

As part of the deal, FamilyMart Uny would sell all of its remaining 60 percent stake in its Uny general merchandise store unit to Don Quijote, which is looking for locations to open more stores, popularly known as “Donki”.

Don Quijote would pay 28.2 billion yen for the additional stake, after taking a 40 percent slice last year.

The companies have already taken steps including the conversion of six Uny locations into a new store format dubbed “MEGA Don Quijote Uny.” Sales from these stores nearly doubled after the conversion, the companies said.

FamilyMart Uny is Japan’s second-largest convenience store operator with about 16,700 locations. Don Quijote is Japan’s largest discounter.

In a separate statement, Don Quijote said it would change its name to Pan Pacific International Holdings Corp and had nominated founder Takao Yasuda back to its board.

Yasuda stepped down from the board in June 2015. The company said Yasuda, currently based in Singapore, would lead its overseas operations from there after rejoining the board.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.