Lawson Inc., Japan's second-largest convenience store chain, said Wednesday it plans to acquire smaller rival am/pm Japan Co. for between ¥14 billion and ¥15 billion as it seeks to expand its operations in the densely populated Tokyo area.
Lawson said it has struck a basic agreement with Rex Holdings Co., the owner of am/pm Japan, for the acquisition.
"By making am/pm (Japan), which has a concentration of store chains and customers in the Tokyo metropolitan area, one of our group firms, we will be able to attain dominance," Lawson said in a statement.
Lawson hopes to better compete with market leader Seven-Eleven Japan Co. by taking over seventh-ranked am/pm Japan, which has over 500 convenience stores in Tokyo's 23 wards, observers said.
The acquisition will be the first major realignment in the industry since Circle K Japan Co. and Sunkus & Associated Inc. integrated their operations in 2001.
Observers said the acquisition of am/pm Japan may trigger another industrywide reshuffle as competition intensifies amid deteriorating economic conditions.
Rex Holdings Co., which owns am/pm Japan, had been looking to sell the convenience store chain after its efforts failed to turn around the money-losing outlets.
Lawson said it will acquire all shares of am/pm Japan for ¥1 from Rex Holdings and others in exchange for taking over am/pm Japan's interest-bearing debts of about ¥20 billion.