Tropicalana is set to buy the shares of its shareholders for $6.8bn, with a view to becoming the second-biggest supermarket in the country.
The supermarket chain, which has been under pressure from the government over its handling of the outbreak of coronavirus, said in a statement that it was “very pleased” to have agreed to acquire a stake in Tropicalana.
The deal will be subject to regulatory approval and is subject to shareholder approval, the company said.
The Australian-owned supermarket chain has been forced to cut jobs and cut prices in the wake of the coronavivirus pandemic, which killed more than 1,800 people and infected over 200,000 people.
The group also has been embroiled in a bitter legal battle with the Chinese food company, Wuhan Organic, over a contract to supply it with refrigerators.
The company has also said it has been unable to meet demand for its products because of the pandemic.
Mr Zong said the supermarket chain had been looking for a buyer to support the business while also increasing revenue.
“We’ve been looking at all different options,” he said.
Tropicalana shares closed at $6,826.40 on Friday.
The deal is the latest in a series of deals to be completed by supermarkets as they grapple with the pandemics, including the $1.2bn sale of Panda Express to China’s JYP Group last month.
“This transaction will provide support to the business in the months ahead, while also enabling the company to continue to focus on its core business,” Mr Zong added.
Tropicana has a total of 10,200 employees and stores around 300 million tonnes of food a year in the state.
In a statement, Tropicalana said it was pleased to have secured a share of the company for its growth and to become an important shareholder in the company.
Its board also said the company had been working with the Australian government to find a way to make the transaction as transparent as possible, and that it would provide the details of the transaction to its shareholders.
The Australian Securities Exchange said Tropicalana’s shares were trading at a premium of $639.85 on Friday and were down by nearly half on the previous day.
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