updated 5/22/2006 8:20:15 AM ET 2006-05-22T12:20:15

Shinsegae Co., a South Korean department store and discount chain operator, said Monday it will buy the South Korean operations of Wal-Mart Stores Inc. for 825 billion won, or $872 million.

Shinsegae plans to operate Wal-Mart Korea as a separate subsidiary and the stores will be renamed to E-Mart, the name of Shinsegae's discount store chain, it said in a statement.

Wal-Mart Korea is a 100 percent-owned subsidiary of Wal-Mart with 16 stores in South Korea.

Shinsegae's E-Mart chain accounts for 30 percent of the local discount store market, according to analysts.

The announcement of the sale came less than a month after Carrefour SA of France, the world's second-largest retailer after Wal-Mart, sold its local unit to E.Land Group, an unlisted South Korean retailer, for 1.75 trillion won ($1.8 billion).

Shinsegae had been a bidder for Carrefour's operations.

The French retailer has been selling underperforming assets in an effort to refocus its spending on core markets such as France. The sale has drawn keen interest from local retailers eager to bolster their position in South Korea's growing discount sector.

The news sent Shinsegae shares up 4.9 percent to 452,500 won in afternoon trading.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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