• Kyodo


Aeon Co. announced Wednesday it will increase its stake in Daiei Inc. to turn the smaller superstore chain into a subsidiary, creating a massive retailing group that will have combined sales in excess of ¥6 trillion.

Aeon, which owns a 19.9 percent stake in Daiei, plans to acquire a further 24.3 percent of the shares from major trading house Marubeni Corp., which has a 29.3 percent stake, in a takeover bid early next month, Aeon President Motoya Okada said at a Tokyo news conference attended by Daiei President Michio Kuwahara.

Aeon aims to take control of Daiei, which has numerous outlets in major cities in the Kanto and Kansai regions, to broaden its customer base and reinforce operations in big urban centers.

The deal will make Aeon the most dominant force in the superstore business.

Giant Seven & I Holdings Co., which runs the Ito-Yokado department store chain and Seven-Eleven convenience stores, is Japan’s second-biggest retailer.

Aeon will presumably renovate Daiei’s aging outlets while expanding its own supply of private-brand products.

The move follows an announcement earlier this month by Aeon that it will acquire the midsize grocery chain Peacock Stores Inc. from J. Front Retailing Co. for ¥30 billion.

“We face severe business circumstances and fierce competition, (and) there are a lot of things we can do” by making Daiei a subsidiary, Aeon President Motoya Okada said in a press conference in Tokyo, adding that the company plans to further expand the number of new stores next year and thereafter.

Marubeni has been rebuilding Daiei since acquiring its stake from the government-backed Industrial Revitalization Corp. of Japan in 2006.

With a foothold in the retail sector, Marubeni aimed to become a dominant force in the food industry by taking advantage of its longtime expertise in importing crops from overseas.

But Daiei missed its business targets year after year due partly to the stagnant economy and persistent deflation.

Aeon previously turned around superstore chain Mycal Corp.

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