Japan’s biggest retailer Aeon Co Ltd is keen in acquiring the Malaysian arm of Britain’s Tesco PLC, said people familiar with the matter.
Notably, the Japanese retailer has been venturing in the South-East Asia region where purchasing power is increasing among fast-growing economies.
This is in stark contrast with the hampered growth witnessed at home due to deflation, shrinking population and sluggish consumer spending.
In 2014, the company expanded its e-money services in Thailand and acquired the Malaysian operations of French retailer Carrefour SA for 250 million euros (RM1.047 billion) in 2012.
Purchasing Tesco’s operations will make Aeon the largest hypermarket group in Malaysia. With 28 hypermarkets across the country, the Japanese retailer eyes to open 100 more stores by 2020. It also owns 51.7 percent of Aeon Co (M) Bhd, which has four MaxValu supermarkets and 29 outlets in Malaysia.
Meanwhile, Tesco is presently seeking buyers for its stake in data-gathering arm Dunnhumby and US$6 billion South Korean business to finance a turnaround in its core home market.
Tesco is trying to recover from an accounting scandal as well as the loss of market share to discount chains Lidl and Aldi.
Keen on acquiring the Malaysia unit of Tesco, Aeon has informally discussed the company’s interest with corporate advisers.
“It’s still in the very early stage,” shared one of the people, who declined to be identified since they were not authorised to divulge the matter to the media.
“It would only come after they are done with South Korea and Dunnhumby.”
Tesco, which has no intention of selling its Malaysian operations, declined to comment on the matter, while an Aeon spokesman said the company is not in talks with Tesco.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my
