FOOD retailer and distributor Dairy Farm International Holdings has reached agreement in principle with Cold Storage (Malaysia) to acquire its existing supermarket business in Malaysia.
Both companies will set up a 50-50 joint venture, which will acquire four supermarkets from Cold Storage for US$5 million and later invest a further $7 million each to develop the business over a five-year period.
''This expansion into Malaysia is a natural extension of Dairy Farm's business and part of its planned growth in the Asia-Pacific region,'' said Chris Nelson, chief executive of Diary Farm-Asia.
''The combination of Dairy Farm's retail expertise and buying power and Cold Storage's knowledge of the Malaysian market will allow this new partnership to offer the same quality and variety of brand-name products at low prices to the growing consumer market in Malaysia as it does in other countries in the region.'' After the acquisition of the initial stores, the joint venture is to embark on an aggressive expansion programme for the operation, which will be managed by Dairy Farm.
Initial growth plans target the Klang Valley, which will be followed by expansion into other parts of Malaysia.