FamilyMart Co. fell after it struck a deal to buy Uny Group Holdings Co. for about 171 billion yen ($1.4 billion) in stock and create Japan’s second-largest convenience store chain.
FamilyMart said it will pay 0.138 of a share for each Uny share, the companies said Thursday, about 5 percent more than the Uny’s closing price in Tokyo the same day. FamilyMart had said in March it planned to merge with the operator of the Circle K and Sunkus chains, then announced terms Oct. 15. Its shares dropped as much as 5.3 percent in Tokyo trading.
The deal pushes FamilyMart past rival Lawson Inc. and leaves it as the country’s biggest chain after Seven & I Holdings Co.’s 7-Eleven. The companies are seeking economies of scale as an aging and declining population undermines growth in the retail industry.
“To survive competition, we have reached a conclusion that we need to combine our resources,” the companies said in the statement. The companies said management structure will be discussed, without setting any timeframe.
The new company targets annual net income of more than 60 billion yen within the five years, FamilyMart and Uny said Thursday.
FamilyMart shares dropped 3 percent to 5,140 yen at 9:18 a.m. in Tokyo trading. Uny will be delisted on Aug. 29, 2016, the companies said.
FamilyMart and Circle K and Sunkus chains had combined revenue of about 2.8 trillion yen in the year ended February 2015, surpassing 1.96 trillion yen at Lawson.