JAKARTA -- Charoen Pokphand Indonesia, an affiliate of Thai conglomerate Charoen Pokphand Group, has struck a 1 trillion rupiah ($75 million) deal to acquire the operator of 7-Eleven convenience stores in Indonesia, aiming to shore up the struggling franchise.
CP Indonesia on Friday said the acquisition of Modern Sevel Indonesia is expected to go through by June, contingent upon regulatory and shareholder approval. Modern Sevel ran a total of 175 outlets as of September 2016, mostly in Jakarta.
Seven-Eleven and other foreign convenience store chains operate under a restaurant format in Indonesia and have struggled to compete with local food vendors, as well as the top two local convenience store brands: Alfamart and Indomaret. The industry leaders each run around 14,000 stores across the archipelago.
Indonesia's 2015 decision to ban alcohol sales at small retail stores also dealt a major blow to 7-Eleven. Modern Sevel said it closed around 25 locations in 2016.
In a news release, Modern Internasional -- Modern Sevel's listed parent -- said it decided to sell "because the business suffered losses in recent years as a result of high market competition, and because the development of the business required substantial capital in the future."
CP Indonesia is the country's top poultry producer, logging 38.25 trillion rupiah ($2.9 billion) in revenue in 2016. The company has been expanding into the beverage segment in recent years, and the acquisition is expected to boost its downstream business.
In Thailand, CP's listed retail unit CP All operates the world's second-largest network of 7-Elevens after Japan, with more than 9,500 outlets.
Nikkei staff writer Yukako Ono in Bangkok contributed to this story.