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Reports in the media say that Wal-Mart has decided to raise its stake in Seiyu, its Japanese affiliate, from the current 42 percent to 50.1 percent when that option kicks in at the end of the year. That move will turn the Seiyu from an affiliate to a full-fledged subsidiary.

Wal-Mart also is expected to increase its stake again in December 2007 to more than two-third ownership of the company.

The move is not unexpected, though it comes as Seiyu as continued to suffer from disappointing financial results. The company had already announced that it planned to open US-style supercenters in Japan next year using the Wal-Mart name in its banners for the first time. Wal-Mart reportedly has been spending considerable time, energy and money trying to modernize Seiyu’s supply chain operations.
KC's View:
The question was never whether Wal-Mart was going to make this move.

The question is how the competition reacts.

We would offer these words of advice to our friends in the Japanese retail business:

Wal-Mart doesn’t beat you. You only beat yourselves.