Taking Keiyo outright and absorbing it into DCM (2023)

Why leave a customer taking 92% of its goods from you outside the group for seven years?

By 2019, when DCM was supplying 92% of Keiyo's purchases, the two were in merchandise terms almost a single company. Even so, the shareholding stopped at 20.1% and the boards stayed separate. The reason the securities report gives for moving to a tender offer in 2023 is neither price nor scale, but a decision-making structure free of the constraints of collaboration. The order — seven years of testing through merchandise before moving on capital — tells you how this company buys.

So far the integration has counted only on the side of size. Revenue in the year to February 2025 at 111.4% of the year before is the result of absorbing Keiyo's ¥91.7bn of sales, not proof that the existing stores got stronger. Consolidated headcount fell from 4,955 to 4,646, and net profit dropped to ¥17.1bn as the gain on step acquisition disappeared. Goodwill of ¥23.3bn remains, to be amortised over twenty years. Folding a relationship that began in joint purchasing into a single company looks likely to take a while yet.