FamilyMart Inks $1.9 Billion Don Quijote Deal in Growth Race
(Bloomberg) -- FamilyMart UNY Holdings Co., Japan’s second-largest convenience-store operator, will acquire a stake in discounter Don Quijote Holdings Co. in a deal valued at 212 billion yen ($1.9 billion), the company announced Thursday.
Don Quijote will become the fourth-largest retailer in Japan by sales after it buys a remaining 60 percent stake in FamilyMart unit Uny that it doesn’t already own for 28.2 billion yen. The unit operates a chain of general merchandising stores and will become a wholly-owned subsidiary of Don Quijote.
FamilyMart will offer 6,600 yen per share for the Don Quijote stake, a 19 percent premium over Tuesday’s closing price, before speculation on the deal surfaced.
- Japan’s saturated convenience-store market has been squeezed by tough competition between three top operators seeking new ways to grow.
- The deal will keep Uny under the FamilyMart umbrella and gives the convenience-store owner a stake in Don Quijote, a retailer respected for posting double-digit growth figures and succeeding in Japan’s tough retail environment.
- The announcement deepens a partnership between the two companies. Don Quijote took a 40 percent stake in FamilyMart’s Uny in 2017, allowing it to operate some of its stores under a joint brand. The two companies are also cooperating on product development and distribution.
- Don Quijote rises as much as 8.1 percent to 6,540 yen, the highest since 1998
- Don Quijote shares jumped 9.4 percent Wednesday on reports of the deal
- FamilyMart drops as much as 6 percent. Shares gained 5 percent to a record high on Wednesday
- Benchmark Topix index drops as much as 3.9 percent