CHINESE supermarket operator Wumart Store Inc will abandon its proposed HK$2.34 billion (US$302 million) takeover deal for 36 outlets of CP Lotus Corporation in China’s mainland.
The news came about two months after the announcement of a framework agreement and share-swapping deal that was expected to consolidate both companies’ presence in the retail grocery market.
They were also supposed to appoint representatives to each other’s boards upon the completion of the proposed acquisition.
Wumart fell as much as 7 percent in morning trading and CP Lotus was also down 4 percent.
CP Lotus Corp said in a stock exchange filing today that “despite extensive negotiations in good faith,” the two parties were not able to reach agreement on certain key terms for the proposed transactions.
Wumart has about 1.8 percent of the retail share among China’s hypermarket chains, compared with PC Lotus’ 2.3 percent in 2012, according to market research firm Euromonitor International.
Retailers are starting to focus on improving store operations instead of expanding retail networks among intensifying competition, especially from online vendors.
Source Shanghai Daily