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Daiei Inc. and its biggest shareholder, Marubeni Corp., said Friday they have picked Aeon Co., the nation’s largest supermarket chain, to gather capital and organize business alliances to rehabilitate the struggling supermarket operator.

Aeon will begin negotiations on acquiring a 15 percent stake in Daiei from trading house Marubeni, which has a 44.6 percent stake, and on acquiring a stake of about 20 percent in grocery store chain Maruetsu Inc. from Daiei.

Maruetsu, owned 37.8 percent by Daiei and 30 percent by Marubeni, operates 193 supermarkets in the Tokyo metropolitan area. By investing in Maruetsu, Aeon, which has a retail network in the Jusco chain, will try to bolster its operations in an area where it has a small presence.

U.S. retail giant Wal-Mart Stores Inc. was also in the race to rehabilitate Daiei but then pulled out.

Marubeni, which has little expertise in retail, hopes to speed up Daiei’s rehabilitation by teaming up with Aeon.

“We believe Aeon will be a good partner for Daiei in helping it to an early revival while respecting Daiei’s brand and its independence in management,” said Kaoru Kuzume, general manager of corporate communications at Marubeni.

Aeon has a good track record at turning around struggling retailers, with Mycal Corp. and the former Yaohan Co., now known as Maxvalu Tokai Co., being good examples, Kuzume said.

Marubeni, Aeon and Daiei will soon establish a joint panel to discuss the specifics on possible alliances, including joint procurement, an information-sharing system, a distribution network and joint development of private-label products. They hope to reach an agreement by March.

“Our intention to remain Daiei’s largest shareholder and our commitment to help Daiei’s management will remain unchanged,” Kuzume said.

Daiei went under the control of the state-run Industrial Rehabilitation Corp. of Japan in December 2004.

Marubeni and private equity firm Advantage Partner Inc. were picked by IRCJ to become Daiei’s sponsors in March 2005. Marubeni became Daiei’s top shareholder in August after buying a 33.6 percent stake from IRCJ.

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