ASEAN KEY DESTINATIONS
Wal-Mart may enter Indonesia
Wal-Mart Stores may become a partner of retailer Matahari Putra Prima in developing its hypermarkets multiple sources said on Tuesday.
International retailers are seeking toeholds in emerging markets as they look for sources of growth outside maturing US and European markets, although the cost of competing is often too much to justify widespread expansion.
Lippo Group, which controls Matahari through holding company Multipolar, last month scrapped plans to sell its Hypermart chain because of low offers and instead opted to seek a global partner to expand.
"Lotte is out due to a disagreement over pricing and branding," said one of the four sources with direct knowledge of the deal, who declined to be identified because the details were not public.
"However, Wal-Mart is still in talks with the group on the possible partner deal."
Wal-Mart and Lotte both had been interested in purchasing the hypermarket assets, along with French retailer Casino Guichard Perrachon and private equity group Carlyle Group, in a sale that Lippo had hoped would raise more than $1 billion.
The partnership could still involve taking a significant stake in Matahari to gain control over the hypermarket assets, the sources said.
Wal-Mart, the world's largest retailer, has a significant investment in China, including 104 hypermarkets, and in India it is part of a joint venture with Bharti Enterprises. Casino recently purchased Carrefour's Thai assets for $1.2 billion.
Lotte already has a significant presence in Indonesia with its Lottemart chain, and it is currently the fourth-largest hypermart player in Southeast Asia's biggest economy.
Indonesia has been a hot investment destination during the past two years, with its stock market surging 46 percent last year. Growing domestic consumption, together with public spending and investment, led fourth-quarter 2010 GDP to rise 6.9 percent.
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