By Zhao Qian

China’s biggest supermarket chain operator, Lianhua Supermarket Holdings, has bought Hualian Supermarket for 492 million yuan ($71.98 million) in a bid to improve its retail business in the Yangtze River Delta, according to an announcement by Lianhua yesterday.

Lianhua bought 100 percent of shares in Hualian from Bailian Group, the country’s largest retailer and Lianhua’s parent company.

“After the purchase, we will take advantage of the superiority of both the two supermarkets to improve the retail chain business in more cities in the Yangtze River Delta,” Ma Xinsheng, chairman of the Bailian Group and Lianhua supermarket stated in the announcement.

Hualian will become a subsidiary of Lianhua, according to the announcement published by Hong Kong Exchanges and Clearing Limited (HKEx).

Parent company Bailian Group was formed in 2004 following a merger the previous year between Shanghai Yibai Group, Hualian Group, Shanghai Friendship Group and Shanghai Materials Group.

Friendship Group is the major shareholder of Lianhua, which listed on HKEx in 2003.

Lianhua had 3,932 chain stores at the end of 2008, while Hualian had 1,183 franchised outlets and 213 chain stores, according to the China Chain Store and Franchise Association.

Both companies have focused their development in the Yangtze River Delta area.

Shares of Lianhua jumped 13 percent in early trade yesterday, closing at HK$19.28 ($2.49), up 12.98 percent from Friday’s close. Hualian delisted from the A-share market in 2006.

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