Wal-Mart Stores Inc., the world's largest retailer, agreed to buy Trust-Mart, a shopping chain in China, for about $1 billion, a person familiar with the proposed acquisition said.
The deal needs approval by Chinese regulators and may not be announced for weeks, said the person, who declined to be identified before an announcement. Trust-Mart spokesman Huang Shiying confirmed it's in talks with Wal-Mart as well as other overseas companies. No buyer or price has been decided, he said.
Buying Trust-Mart will more double Wal-Mart's stores in China's $841 billion retail market. Expansion in the world's fourth-largest economy may counteract slowing U.S. sales and bolster revenue from overseas after its mid-year withdrawal from Germany and South Korea.
"This will give them more scale in a market that is going to be increasingly more important for them,'' said Patricia Edwards, a Seattle-based money manager at Wentworth, Hauser & Violich, with $8.2 billion in assets including Wal-Mart shares.
Wal-Mart initially will purchase 31 stores from Trust-Mart and gradually increase its holdings, giving it a bigger foothold in China than French rival Carrefour SA, according to the Wall Street Journal, which reported the deal earlier today.
The Bentonville, Arkansas-based company already runs more than 60 stores in China and has said it plans to open 20 more this year. Wal-Mart spokeswoman Beth Keck declined to comment.