WalMart is Going For the Gold

Tuesday, October 17, 2006 1:24
Comments Off on WalMart is Going For the Gold

As reported by WSJ, IHT, NY Times, and a host of others, Wal-Mart (China’s 7th largest trading partner), is in the final stages of negotiation for the purchase of Trust-Mart, a Taiwanese company.

The price of entry is a reported 1 billion dollars and the prize is over 100 stores in 20 provinces (Wal-Mart currently reports having 66 stores) employing over 30,000 persons.

While not finalized, and yet to be confirmed by Wal-Mart, they appear to have beat out international (TESCO and Carrefour) and local (Lianhua) retailers in the bidding process.

Giving Wal-Mart a huge retail boost, this deal is sure to have a number of hurdles, and it will be interesting to see how the new M&A and anti-trust regulations are applied here. Another interesting angle will be how those rules will be applied to a Taiwanese company, economically separate from the mainland, and where the structures are being set up.

Should this deal go through, the points in my previous post (China’s New Found Economic Nationalism) will only carry more weight, it is not the size of the deal, but how you execute the deal that matters. It is not about economic nationalism, but good business that ultimately benefits Chinese consumers that determines whether or not a deal gets stuck in a holding pattern, denied, or accepted.

I am sure Carlyle is watching carefully …

Both comments and pings are currently closed.