Shanghai Friendship & Overseas Co. Ltd. announced its plan yesterday to buy an additional 3.4 percent stake in the Shanghai Lianhua Supermarket Co. Ltd., China's largest supermarket chain operator.

Valued at 30.6 million yuan (US$3.7 million), the purchase will make Friendship & Overseas the company's majority shareholder, with a 51 percent stake. It also will allow Friendship & Overseas to include Lianhua's operation in its financial report.

"The overall department store industry is sluggish, so we hope to diversify our business to find new engines to propel profits," said a Friendship & Overseas official. "Lianhua's supermarkets are generating satisfactory profits."

Launched in 1991, Lianhua runs 734 supermarkets and 239 convenience stores in China.

In Shanghai, Lianhua and France-based Carrefour SA have opened the only profitable foreign stores.

(Eastday)