Wal-Mart to acquire biggest Chilean retailer

20 December 2008

The world's biggest retailer, Wal-Mart, will be expanding its operations in Latin America by making a tender offer for Chile's biggest retailer, Distribucion y Servicio, to acquire all its issued and outstanding shares and American depositary shares at $40.08 per common share.

The Bentonville, Arkansas-based retailer said the controlling shareholders of D&S, the Ibanez family have all agreed to sell a part of D&S shares and from Tuesday Wal-Mart would start offering to pay $40.8 cents a share for D&S stock, a price, which is a premium of about 37.4 per cent over the stock's average closing price for the past 30 trading days.

"Moving into Chile is an important step in implementing Wal-Mart International's strategy. We continue to focus on portfolio optimisation, global leverage and winning in every market," said Michael T. Duke, vice chairman, Wal-Mart Stores''.

"A successful tender offer will give Wal-Mart the opportunity to be a significant participant in Chile, which continues to have a strong and growing economy among South America countries," he added.

Wal-Mart has set as a minimum condition of the tender offer, the acquisition of at least 50.01 per cent of D&S's fully-diluted common shares.

D&S has the largest chain of supermarkets in Chile and is made up of a group of companies whose core business is food retail through 115 supermarkets and hypermarkets under the banner of Lider and SuperBodega and also operates 30-plus discount food stores under the Ekono banner.