Seven & I Holdings Co., owner of 7-Eleven convenience stores in Japan and the United States, said Monday it will pay 131.1 billion yen ($1.13 billion) to buy department store operator Millennium Retailing Inc. in a deal creating Japan's biggest retailer.
Tokyo-based Seven & I will complete the transaction in two steps, first buying a 65 percent stake in Millennium currently held by Nomura Principal Finance for 131.1 billion yen in cash by the end of March, Seven & I said in a statement.
It will then buy the remaining 35 percent directly from Millennium in a stock swap by June. Millennium is an unlisted company.
Aside from 7-Eleven, Seven & I also owns the Ito-Yokado supermarket chain. Millennium owns Japanese retailers Sogo Co. and Seibu Department Stores Ltd.
Their combined revenue would come to around 4.5 trillion yen ($38.8 billion) for the year ended Feb. 28, making Seven & I the biggest in Japan's retail industry followed by Aeon Co.
The merger could help Seven & I by broadening its range of revenue and increasing its offerings of luxury goods, at a time when consumer spending is on the increase with a recovery in Japan's economy, the world's second-largest.
Seven-Eleven Japan became a shareholder in Dallas-based 7-Eleven Inc. in 1991 and finished buying all the shares in November. The move was designed to make 7-Eleven more competitive by boosting investment in merchandising, store renovations and distribution.