The Chinese retail giant, Wumart Stores Inc, has decided to take over its minor competitor, the Beijing MerryMart Chainstore Development Co. ltd., in a 373 million yuan (46 million U.S. dollars) move, China Daily reports Friday.

Wumart, the 10th largest chain store operator in China and the largest of its kind in Beijing, has signed the acquisition deal with MerryMart's stakeholders, giving it 75 percent of its Beijing rival.

According to the English newspaper, the top Beijing retail chain operator will pay 253.5 million yuan (31 million dollars) to acquire 68 percent of MerryMart and contribute another 120 million yuan (15 million dollars) to increase the capital scale of MerryMart, which will allow Wumart to control 75 percent, when the deal is completed.

MerryMart is the fourth largest retail chain in Beijing and operates 23 stores in the Chinese capital. Its un-audited revenues for 2005 were 1.65 billion yuan (205 million dollars) with profits of 33.46 million yuan (4million U.S. dollars).

"The combination of Wumart and MerryMart will further change the landscape of the retail market in Beijing and set an example for the domestic retail industry to increase its competitiveness through expansion and consolidation," the newspaper quoted Zhu Younong, the president of MerryMart, as saying.

There are more than 40 domestic chain stores in Beijing and most of them are weak, so domestic players will need to unite to complete, the newspaper says.

Source: Xinhua