HONG KONG â€" A proposed $745 million tie-up between the Chinese supermarket operator Wumart Stores and C.P. Lotus, a retailer in China controlled by the Thai billionaire Dhanin Chearavanont, has fallen apart after the two sides failed to agree on final terms of the deal, both companies said Monday.
There have been several recent attempts at consolidation in China’s fast- growing but fragmented supermarket sector, with varying degrees of success. The collapse of the C.P. Lotus-Wumart transaction caps what has otherwise been a year of extraordinary deal making for Mr. Dhanin, whose Charoen Pokphand Group invests in businesses as varied as agriculture, telecommunications and insurance.
‘‘Despite extensive negotiations in good faith, C.P. Lotus and Wumart were not able to make sufficient progress in reaching agreement on certain key terms for the proposed transactions,’’ Mr. Dhanin’s company said Monday in a stock exchange announcement.
Wumart, which operates a chain of more than 500 hypermarkets and convenience stores in northern China, said in announcing the deal’s collapse that it ‘‘would wish to emphasize that it has taken into account the best interests of its shareholders.’’
The two sides did not finalize a deal by their self-imposed deadline of Saturday, and both said Monday they had agreed not to extend negotiations.
Under the terms of the tie-up announced in October, Wumart was to have paid 2.3 billion Hong Kong dollars, or about $300 million, to acquire 36 stores in northern and eastern China from C.P. Lotus, which reported revenue for 2012 of 7.1 billion renminbi, or $1.2 billion.
Wumart was also to have paid 548 million dollars for a 10 percent stake in C.P. Lotus, and Mr. Dhanin’s firm was to have bought a 13.8 percent stake in the Chinese company for 2.9 billion dollars.
Announcing the plans in October, Wumart had said the deal would give it ‘‘an immediate entry into important geographic regions such as eastern China, consistent with Wumart’s strategy. The established network and premium locations of the acquired stores would otherwise be difficult to build organically.’’
Supermarket sales in China last year were 1.8 trillion renminbi, or nearly $300 billion, up 10 percent from 2011, according to figures from Euromonitor International, a global research company. Sales are forecast to rise 25 percent by 2015. Yet the sector remains highly fragmented, with no supermarket chain capturing more than 5 percent of the country’s market.
In September, the British retailer Tesco said it would pay 345 million pounds, or about $558 million, to fold its loss-making Chinese operations into a new partnership with China Resources Enterprise, a state-run retailer.
Over the summer, ParknShop, the Hong Kong supermarket chain owned by the billionaire Li Ka-shing, put itself up for sale, seeking offers of $3 billion to $4 billion. But the bids that came in from other retailers in the Asia-Pacific region and from private equity groups fell short of expectations, and in October Mr. Li’s Hutchison Whampoa said it would not sell ParknShop.
The failure of Wumart and C.P. Lotus to execute their deal was a rare miss for Mr. Dhanin. In July, his True Corporation, a telecommunications company, said it would seek as much as $2.3 billion by spinning off 3G and broadband networks in a share sale in Bangkok.
In April, another one of Mr. Dhanin’s companies said it would buy the discount retailer Siam Makro for more than $6 billion. And in February, CP Group completed the $9.4 billion purchase of a 15.6 percent stake in the Ping An Insurance Group of China from HSBC Holdings, a deal it had announced in December of last year.
Shares in Wumart fell on news that the deal was scrapped, and were down 5.8 percent at the noon trading break in Hong Kong. Shares in C.P. Lotus were down 3.8 percent.
