Lucio Co mulls merger of Puregold and S&R

MANILA, Philippines - Filipino-Chinese businessman Lucio Co is studying the possibility of merging his high-end, membership-only S&R shopping club with the flagship Puregold chain of supermarkets.

In a disclosure to the stock exchange yesterday, Puregold said its board had authorized management to discuss the possible merger with and acquisition of S&R “at terms and conditions satisfactory to both parties.”

The planned merger, which will consolidate all of Co’s retailing businesses, is aimed at further enhancing shareholder value, achieving economies of scale, and gaining more market share.

S&R currently has six branches located in Bonifacio Global City, Alabang, Congressional Ave. in Quezon City, Aseana-Baclaran, Cebu and Pampanga. Puregold, on the other hand, opened 38 new stores in 2011, boosting its branch network to 100. Just last month, the company opened a branch in La Trinidad, Benguet and plans to open 24 more for the rest of the year.

Puregold plans to double the number of its stores by 2015 as it penetrates new markets in the Visayas and Mindanao.

Local food retailing is rapidly modernizing and expanding with upscale supermarket chains displacing the traditional small-scale retail outlets. This market has been dominated by companies such as SM Supermarket/SM Hypermart, Puregold/S&R, Robinsons/Big R, and Rustans/Shopwise.

Modern convenience stores have also been expanding to capitalize on the strong demand for convenience. Growth in this segment is also due to a robust business process outsourcing industry.

From its first store on Shaw Blvd. in 1998, Puregold has grown leaps and bounds and now serves over two million households.

Puregold debuted on the stock exchange in October last year, raising P7.5 billion from the sale of 600 million shares.