PX Mart's acquisition of RT-Mart could worry Carrefour: economist
Taipei, Oct. 23 (CNA) A deal for Taiwanese supermarket chain PX Mart to acquire hypermarket operator RT-Mart could pose big challenges for Carrefour as the acquisition will help PX Mart extend its reach to the hypermarket business, according to an economist.
"The acquisition deal is expected to boost competition in Taiwan's hypermarket sector," Li Shyh-jane (李世珍), deputy director-general of the Commerce Development Research Institute, said. "It is possible that Carrefour might get nervous."
On Friday night, PX Mart stunned the local retail industry by announcing it would acquire RT-Mart, with the acquisition expected to be completed in mid-2022.
In a statement, PX Mart said it will acquire RT Mart International Ltd. from France-based retailer Auchan and Taiwan-based conglomerate Ruentex Group.
The transaction will cover buildings and land owned by RT-Mart as well as its distribution rights and the self-developed RT-Mart brand, the statement said, but the deal still requires regulatory approval.
"RT-Mart is ahead of Carrefour in service technology innovations," Li said, referring to RT-Mart's digital payment applications, which have created a convenient environment for shoppers.
PX Mart already has its PXPay digital payment application in place by consolidating its online and offline customer bases through better use of technology to record customers' shopping habits, Li said.
"After PX Mart and RT-Mart integrate their digital resources, the combination could be extraordinary," Li added.
Li said the acquisition deal is expected to create synergy for PX Mart.
"PX Mart and RT-Mart are complementary to each other and each of them has a different customer base, so the combination is expected to help PX Mart broaden its customer portfolio," Li said.
However it will still take some time to observe whether the integration process for PX Mart and RT-Mart will proceed smoothly, added Li.
Found in 1998, PX Mart is the largest supermarket chain in Taiwan with 1,056 outlets nationwide, and expects sales for this year to hit NT$150 billion (US$5.36 billion).
Earlier this year, PX Mart opened a 4,000-ping (13,200 square meters) flagship store in Taipei's Nangang District, moving it one step forward toward a goal of running large-sized stores.
The supermarket chain has a plan to boost its outlet numbers to 1,100 in 2021 and push its revenue up to more than NT$160 billion. RT-Mart has 22 outlets in Taiwan, making it the second-largest hypermarket chain in Taiwan after Carrefour.
After acquiring Wellcome Taiwan Co. Ltd, which operated supermarket chains Wellcome and Jasons Market Place in Taiwan, last year, Carrefour has a total of 354 outlets around the country, expecting sales for 2021 to hit NT$90 billion.
PX Mart did not provide any financial details about the acquisition, but Ruentex Group subsidiaries Ruentex Development Co. and Ruentex Industries Ltd. said in a statement released on Friday that they will sell their stakes in RT Mart International for NT$1.303 billion each.
Ruentex Development and Ruentex Industries said they are expecting to book gains of NT$1.175 billion and NT$1.151 billion, respectively, on the sale.
According to Ruentex Development and Ruentex Industries, RT-Mart's book value per share is NT$25.48.
Industry sources said the consideration of the acquisition could top NT$13 billion.
In an internal letter to RT-Mart's employees, Edgard Bonte, head of Auchan, said the deal is part of his group's global strategy, which was adjusted in March 2020 to dispose of its "nonstrategic" assets. In October 2020, Auchan withdrew from the China market.
Bonte praised PX Mart as a capable and professional retail business operator, saying he has faith that the new owner will raise RT-Mart's competitive edge.
After the acquisition, Auchan, which currently owns a stake of about 65 percent in RT-Mart, is likely to withdraw from the Asian market, market analysts said.
- Science & Tech
Medigen gets funds from global foundation for mix-and-match booster trials12/02/2021 10:51 PM
Taiwan badminton duo Lee and Wang keep Finals hope alive12/02/2021 10:27 PM
City councilor calls nuclear plant 'failed' investment project12/02/2021 10:08 PM
Taiwan basketballers hail entry to East Asia Super League12/02/2021 09:31 PM
Local securities firm chairman questioned by authorities12/02/2021 08:58 PM