Retailers Warm Up to Russia

Wal-Mart, which has been in China since 1999, announced last month the acquisition of 35% of Taiwan-based Trust Mart for a reported $1 billion. The Bentonville, Ark., retailer -- which has 73 stores in China already -- is expected to take control of the 101 Trust Mart stores by 2010. The deal follows the December 2006 acquisition by Tesco of the same Taiwanese company's Chinese superstore venture. And Carrefour has a large presence in China already, where most of its stores are concentrated in Shanghai and Beijing.

As for Tesco, on Wednesday the British retailer announced that it was selling the real estate assets of 50% of 21 stores to British Land for 650 million pounds, or about $1.3 billion. The sale-and-leaseback agreement would net the British retailer 570 million pounds, about $1.1 billion, after taxes.

The money would fund the supermarket and discount store chain's expansion overseas, the company says. Tesco didn't provided further details, but it already has operations in China and is reportedly planning to expand into Russia, according to The Guardian U.K.

While the exact strategy the retailers will take if they decide to launch in Russia is still uncertain, it appears that with the companies' hefty cash positions now, acquisitions (like those in Asia) are certainly possible. Both Wal-Mart and Tesco have raised $1 billion in the last three months in the cheap long-term corporate debt market.