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TOKYO -- Convenience store chain FamilyMart Co. said Friday it will acquire smaller rival am/pm Japan Co. and turn it into a subsidiary, in a bid to boost its competitiveness with other rivals amid sluggish consumption and raise its profile in the Tokyo metropolitan area, Kyodo News International reported.
Third-ranked FamilyMart will purchase all shares in seventh-ranked am/pm Japan from its parent company, Rex Holdings Co., in a Dec. 24 transaction to be worth 12 billion yen.
With this acquisition, FamilyMart will have a combined total of about 8,700 stores in Japan, helping the retailer close in on second-ranked Lawson Inc., which has approximately 9,700 stores, while industry leader Seven-Eleven Japan Co. has nearly 12,500 outlets.
FamilyMart President Junji Ueda indicated that more than 250 of am/pm Japan's roughly 1,100 stores as of the end of October are unprofitable and may be closed. Meanwhile, roughly 600 other stores under direct supervision of am/pm Japan will be renovated. Under the deal, all am/pm stores will be rebranded as FamilyMart, according to the report.
Ueda told a news conference: "It would be better to carry the same brand for cost-cutting purposes given huge investment for information and technology." FamilyMart said it will consult with am/pm Japan on their merger, targeting spring of next year.
Through the move, FamilyMart said it hopes to strengthen its hold in the Tokyo metropolitan area, a source of strength for am/pm Japan, which has many stores at strategic places in the metropolis. The deal will increase the two chain's combined stores in Tokyo to about 1,700, which would surpass the corresponding figure for Seven-Eleven Japan, which has 1,646 Tokyo stores as of Oct. 31, the report stated.
FamilyMart also said it aims to streamline management infrastructure by sharing systems infrastructure, purchase of products and raw materials, and commodity distribution.
Toshinori Honda, am/pm Japan president, said his company agreed to the buyout after "judging that it can no longer protect its outlets with its business resources alone."
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