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Wal-Mart Stores Inc. (NYSE: WMT) agreed to acquire Inc. for $3.3 billion, to position Walmart for faster e-commerce growth and to better compete against Amazon. Citigroup Global Markets acted as financial adviser to Liverpool, and Galicia Abogados acted as legal adviser. The deal is subject to regulatory approval, and other customary closing conditions, and is expected to close during the first quarter of 2017. The move comes a month after Liverpool agreed to acquire at least 25.5% and up to 100% of Ripley Corp. SA (BCS: RIPLEY), a Chilean department store, financial services, and shopping malls management company. As part of the deal, Ripley’s current controlling shareholder is the Calderon Volochinsky family, which owns 53% of the company. Fitch Ratings has affirmed Liverpool’s Long-Term Local and Foreign Currency Issuer Default Ratings at ‘BBB+’ and has revised the Rating Outlook to Stable from Positive following the company’s announcement to acquire 100% of Suburbia. Fitch has also affirmed Liverpool’s long-term National scale rating at ‘AAA(mex)’. In Fitch’s opinion, “the addition of Suburbia to Liverpool’s portfolio should strengthen its business position in the medium- to low-income segment, create opportunities to capture synergies, and open the possibility to expand its financial business to Suburbia.” Fitch believes the Ripley and Suburbia deals “will not have an impact on Liverpool’s ‘BBB+’ rating given its solid balance sheet and current low leverage.” Fitch Ratings says it believes that Liverpool “is well positioned to continue its business strategy given the demographic and socioeconomic fundamentals in Mexico, with a growing middle class, low inflation rates, higher real wages and higher remittances due to the peso depreciation.” “Liverpool’s growth will be underpinned by its store expansion plan in conjunction with an increased loan portfolio,” added Fitch. The company expects to continue funding its growth strategy through cash on hand and operating cash flow. In Fitch’s view, Liverpool’s recent acquisitions – if materialized – “will strengthen the company’s business position by expanding its target market and geographic footprint, positioning it as a relevant player within the Latin American region in terms of scale and purchasing power.” Liverpool is the leader in the middle, middle-high and high-income segment of department stores in Mexico, operating 17 shopping malls including Perisur and Galerías Monterrey. The company operates 113 stores across 57 cities throughout Mexico, 80 under the name of Liverpool, 29 stores called Fabricas de Francia, and four Liverpool Duty Free stores. About 80 percent of total units are owned by Liverpool. The company also has 25 shopping malls operating in 16 cities and owns a non-controlling 50% stake in Regal Forest Holding Co., which has 14 different store brands selling consumer durable products in 20 countries around Central and South America and the Caribbean. Liverpool, first called The Cloth Case, was founded in 1847 by Jean Baptiste Ebrard, a Frenchman who first started selling clothes in cases in Mexico City’s downtown. In 1872, he started importing merchandise from Europe with much of the merchandise coming from the Port of Liverpool, England, prompting Ebrard to adopt the name Liverpool for his store. In 1862 he opened its second store and since then it has not stopped growing.]]>