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KARLSRUHE, GERMANY - WalMart advanced its effort to become a global brand and gained a toehold on the European continent with the recent acquisition of German hypermarket retailer Wertkauf. Terms of the deal were not disclosed, but privately held Wertkauf's 21 stores last year posted sales of approximately $1.4 billion. The acquisition will not have a material impact on earnings in 1998, according to Wal-Mart.
Wal-Mart officials character ized Wertkauf as an "excellent fit" and an acquisition that provides the company with an ideal entry into a new market.
Wertkauf's stores average about 110,000 sq. ft., which is large for Germany, but only as big as Wal-Mart's smallest domestic supercenters.
The deal also caps a record year for Wal-Mart's rapidly expanding international division, which turned profitable during 1996. Profits then accelerated during 1997. Through the three quarters of 1997, international profits were $85 million compared to a $41 million loss the previous year. Wal-Mart has told analysts that Wertkauf is already a profitable operation.
Even so, Wal-Mart faces many challenges if it plans to grow within the German...