Poundland, a famous goods store chain is going to buy its rival, 99p Store.
According to the media, Poundland will pay 47.5 million GBP in cash and 7.5 million GBP in new shares for 99p Store. There are approximately 250 shops of 99 Store in the UK. On the other hand, Poundland has a total of 600 shops in the UK as well as Ireland and Spain.
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The price of each item in 99p Store will be raised by one penny if this deal is successful. It seems to have no impact on the daily life of citizens. In my opinion, one penny of change is rather cumbersome.
This kind of stores is common also in Japan. Some companies, such as Daiso and Can Do, manage hundreds of shops in which almost all items are sold for 100 JPY. Daiso has advanced to the US and some other foreign countries. Compared to these domestic stores, Poundland and 99p Store sound a little inferior, mainly for the currency rate. One pound is equal to 180 JPY in today's rate, so I feel as if the items are expensive in Poundland. Nevertheless, these stores help my customer experience a lot.
The stakeholders are affirmative to this deal. The stock price of Poundland rose by 10%. If Poundland monopolizes the market, it will hardly to raise the price of each item. Otherwise, it would become Two-Poundland. This acquisition will be beneficial for both the company and consumers.