Trading house M'bishi, Aeon eye capital, business tie-up

TOKYO, Dec. 6 Kyodo - Mitsubishi Corp. and Aeon Co. are considering forming a comprehensive capital
and business tie-up, industry sources said Saturday.
Under the envisioned tie-up, Mitsubishi will acquire a 5 percent stake in Aeon
for about 30 billion yen to become the retailer's top shareholder, outstripping
Mizuho Corporate Bank which has a 3 percent stake, according to the sources.
The two companies also plan to jointly engage in global procurement of goods
and cooperate in opening outlets overseas, they said.
Mitsubishi and Aeon are expected to make a final decision at their respective
board meetings, possibly Monday, before an official announcement, the sources
said.
With the tie-up, Aeon, facing sluggish consumption, intends to promote
management efficiency through cost cuts in procurement and distribution of
goods, while Mitsubishi expects the alliance to help its efforts to diversify
its sources of revenue, according to the sources.
The tie-up between the giant retailer with annual sales of over 5 trillion yen
and the nation's leading trading company may trigger full-scale reorganization
of the retail industry, which is suffering from a deteriorating business
environment with lower profits, they said.
Under the tie-up, Aeon will enhance procurement of low-priced and safe foods
and clothing of foreign origin by making use of Mitsubishi's global procurement
network, according to the sources.
With support from Mitsubishi, Aeon will also accelerate advances into overseas
markets such as China, where the retailer aims to open as many as 100 outlets,
and Southeast Asia.
The two companies are also considering having Life Corp., a leading food
supermarket chain in which Mitsubishi is a major shareholder, cooperate with
Aeon in procurement and sale of goods under an original brand, the sources
said.
Among other future areas of cooperation under negotiation are a tie-up between
convenience store chain Ministop Co. under Aeon's wing and Lawson Inc., in
which Mitsubishi has a major stake, allowing customers at Lawson outlets to use
Aeon Bank financial services, and a mail order business via the Internet, they
said.
Aeon booked a group net loss of 16 billion yen in the six-month period through
August.
Mitsubishi, some 80 percent of whose profits come from resources-related
businesses with those from retail business groups accounting for less than 10
percent, recorded a group net profit of 289.1 billion yen on sales of 13.18
trillion yen during the six-month period through September.
==Kyodo
2008-12-06 21:58:06