Wal-Mart Puerto Rico Acquires Supermercados Amigo

Wal-Mart Puerto Rico has acquired Supermercados Amigo, the number one supermarket chain in Puerto Rico, operating 35 supermarkets and employing more than 4,500. The supermarkets, founded in 1966, will continue to operate under the Amigo brand name and its operations will continue to be managed by Jose Revuelta, president of Supermercados Amigo. Revuelta also will become chief operating officer of Wal-Mart Puerto Rico and will lead the company's food division.

Wal-Mart has plans to invest more than $400 million in Puerto Rico in the next five years, according to Bill Cahill, president of Wal-Mart Puerto Rico. The transaction will be completed as soon as the pertinent government authorities give final consent. If approved, Wal-Mart Puerto Rico will operate 52 units on the island, including nine Wal-Mart stores, one Wal-Mart Supercenter, seven Sam's Clubs and 35 Amigo supermarkets.

Moderator Comment: What next for Wal-Mart?

Wal-Mart's success in Latin America has been, well, Wal-Mart like and there is still plenty of room for growth. With a presence in Mexico, Argentina, Brazil and Puerto Rico the chain has opportunities within these markets and others not yet entered to build on legend of the company that Sam built.

Although the chain usually prefers the organic growth route, it has shown a willingness to acquire market share as in the case with Supermercados Amigo here and ASDA in England. Assuming approval of the deal, Supermercados Amigo stores will soon institute price rollbacks as a benefit of increased purchasing power and, eventually, improved logistical efficiencies.

Where will Wal-Mart go from here. With an apparent softening in relations with Cuba since September 11^th is it possible that we will see Fidel Castro cutting the ribbon to open a Sam's Club in Havana? [George Anderson - Moderator]