Let's snook 'em

Wednesday, September 06, 2006

Makro on Sale

makro cash carry

Makro Cash & Carry is leaving Malaysia. All the shareholders which are SHV Holdings NV (65%), PKNS (20.7%) and PKNS-LFD (14.3%) are selling their stakes in Makro. Makro has 8 stores in Malaysia at the moment. This piece of news came as a surprise to me. After all, Makro has just announced refurbishment plans for their existing stores and expansion plans of 7 new stores within the next 3 years. Will Metro or Walmart penetrate the Malaysian market by taking over Makro Cash & Carry? I doubt it since I believe this market is too small for either Metro or Walmart. I believe that Tesco is the most likely retailer to buy up Makro. Tesco's initial expansion has been hampered by the guidelines set by the Ministry. I also doubt a new foreign player will enter this market until the new guidelines are released. Tesco can also boost its presence in Cheras, JB, Seberang Perai and Seremban, areas in which Tesco is not available at the moment. Let's wait and see since the sale is expected to be completed by year end.

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