Shares of Japan’s third-largest convenience store chain Lawson surged 18% after it received an offer to go private. The offer would see conglomerate Mitsubishi and mobile carrier KDDI jointly manage the convenience store chain, with each owning a 50% stake, reported CNBC.
KDDI will launch an offer worth around 500 billion yen ($3.4 billion) around April to purchase shares from general shareholders, with the process expected to be completed around September, said Kyodo News.
According to Kyodo, the move comes as KDDI seeks to strengthen its consumer-oriented business outside the telecommunications industry by using the purchasing data of convenience store customers and for its financial and other services.
Lawson, which became a partially owned subsidiary of Mitsubishi in 2017, aims to gain a competitive advantage by developing new digital services amid challenges in increasing its number of stores. The convenience store operator will implement KDDI's technologies to improve the efficiency of its distribution network and strengthen its store functions during disasters.
Lawson President Sadanobu Takemasu and Mitsubishi President Katsuya Nakanishi also welcomed the utilization of KDDI's technologies and strong customer base, citing their potential in developing future services.
“Convenience stores are extremely important as social infrastructure. We will fully utilize the power of telecommunications to build future stores,” said KDDI President Makoto Takahashi at a joint press conference in Tokyo.
KDDI intends to leverage Lawson's approximately 14,600 stores nationwide to promote its banking and insurance products, a business area it has focused on in recent years amid intensifying competition in the mobile phone industry.
According to TelecomTV, the catalyst behind the move is Japan’s changing demographics. The country’s population is shrinking and aging, and KDDI expects convenience stores to play an increasingly important role in Japan’s society.
“However,” TelecomTV said, “such businesses need to be run in a more efficient way (enhanced by digital technology) as labor shortages are making it harder to source staff to work at such stores … In addition, it’s increasingly important to have a broad range of products and services available via a single location to meet consumer needs.” In addition to Lawson’s current offerings, KDDI will add its products and services and fit the stores with online remote customer service terminals.