TRADING FIRM ITOCHU LIKELY TO ACQUIRE AM/PM CHAIN

       Major trading firm Itochu has emerged as the apparent final candidate to acquire Japan's seventh largest convenience store chain am/pm Japan, and if realised, this would see three of the nation's major convenience store chains under one umbrella.
       Writh trading firms utilising their strengths, such as merchandise procurement, logistics and financial prowess, it appears highly likely that the reorganisation of the nationa's saturated convenience-store industry will be guied by these firms.
       Itochu already has strong businessties with the convenience store chains FamilyMart and Circle K SunKus. There are over 40,000 convenience stores in Japan, but sales at existing major convenience stores have declined year on year for eight consecutive years.
       Itochu's acquisition or am/pm is aimed at increasing the number of convenience store chains attached to the firm to better allow it to boost product procurement, which will give the firm an advantage in price negotiations with suppliers. It also is expected that the group's distribution system will become more efficient due to an increase in the number of convenience stores under its wing.
       The biggest issue for Itochu in negotiations with Rex Holdings, am/pm's parent firm, likely will be the purchaase price. Itochu is seeking to buy am/pm for 10 billion yen (Bt3.6 billion), which is significantly less than the 14.5 yen billion proposed by Lawson.