Report: Japanese c-store FamilyMart in talks to buy rival

Tokyo Japan’s third-largest convenience store operator is reportedly in talks to acquired am/pm Japan Co., according to Reuters.

FamilyMart Co. is said to be eying the smaller rival in order to better compete in the highly competitive environment.

With more than 40,000 stores nationwide, Japan's convenience store chains are faced with weak growth prospects at home, prompting them to look for acquisitions and overseas expansion.

The Nikkei Business Daily reported earlier that FamilyMart and its top shareholder Itochu Corp. would likely buy am/pm Japan Co. from its parent Rex Holdings Co. for 10 billion yen ($110 million).

But it remains unclear whether the parties have resolved issues that had forced Japan's No. 2 chain Lawson to give up its plan to buy am/pm Japan earlier this year.

A Lawson source said at the time that the $149 million deal fell apart because the U.S. owner of the am/pm brand, am/pm International, demanded that many of the stores retain the am/pm name.

FamilyMart president Junji Ueda has said any acquisition of another chain is unlikely to work unless it can put all stores under the FamilyMart brand.