Suning to acquire DIA Group's retail business in China
Suning Group said it would fully acquire DIA Group's retail operations in China to combine their retail resources, as the Nanjing-headquartered home electronics retailer eyes expansion into the community store sector.
The transaction means the exit of DIA Group from China since first entering the market in 2003, although the deal is still subject to approval by Chinese antitrust and regulatory authorities. Both parties have so far remained silent on the value of the deal.
Suning Group's affiliate, Suning.com Supermarket Ltd, will acquire two wholly owned subsidies: DIA Tiantian (Shanghai) Management Consulting Services and Shanghai DIA Retail Co, according to a joint statement.
The Spain-headquartered DIA Group gradually exited the Beijing market several years ago, but still operates about 300 stores in Shanghai's downtown area, albeit with lackluster performance.
Vice president of Suning's retail business unit, Bian Nong, said that DIA Tiantian's physical outlets could help cut Suning's operational costs in Shanghai, and that they would fit in well with Suning's community store strategy.
Suning's convenience stores, "Suning Fresh," now cover 43 cities, offering lifestyle services and fresh food for nearby neighbourhood residents. They aim to open 1,500 community stores by the end of this year.
Representatives said it's all part of the company's smart retail strategy, and that it will also combine its membership resources with about 2.5 million DIA supermarket members in Shanghai.
Suning and DIA Group are also in discussions over a partnership relating to imported products and supply chain management.
