The world's biggest retailer, Wal-Mart, will be expanding its operations in Latin America by making a tender offer for Chile's biggest retailer, Distribucion y Servicio, to acquire all its issued and outstanding shares and American depositary shares at $40.08 per common share.

The Bentonville, Arkansas-based retailer said the controlling shareholders of D&S, the Ibanez family have all agreed to sell a part of D&S shares and from Tuesday Wal-Mart would start offering to pay $40.8 cents a share for D&S stock, a price, which is a premium of about 37.4 per cent over the stock's average closing price for the past 30 trading days.

"Moving into Chile is an important step in implementing Wal-Mart International's strategy. We continue to focus on portfolio optimisation, global leverage and winning in every market," said Michael T. Duke, vice chairman, Wal-Mart Stores''.

"A successful tender offer will give Wal-Mart the opportunity to be a significant participant in Chile, which continues to have a strong and growing economy among South America countries," he added.

Wal-Mart has set as a minimum condition of the tender offer, the acquisition of at least 50.01 per cent of D&S's fully-diluted common shares.

D&S has the largest chain of supermarkets in Chile and is made up of a group of companies whose core business is food retail through 115 supermarkets and hypermarkets under the banner of Lider and SuperBodega and also operates 30-plus discount food stores under the Ekono banner.

Craig Herkert, Wal-Mart International president for the Americas, said Wal-Mart and D&S share "a laser focus" on price leadership.

"Both companies also have the same core values and business philosophies: respect for the individual, service to the customer and striving for excellence," Herkert said.

Chile's economy is the fifth largest in South America and the Chilean retail industry will heat up to the competition from the US giant retailer who also has a large presence in Latin America with its chain of stores in Honduras, Mexico, Costa Rica, El Salvador, Argentina, Brazil, Puerto Rico and Nicaragua.

The international business for Wal-Mart has done exceptionally well with a sale turnover of $90.6 billion last year, which is 24 per cent of the retailers total revenue of $374 billion.

Its international businesses profits rose 11 per cent in the last quarter compared to a rise of 7 per cent in the US.

Due to the economic slowdown and recession sliding into the US, the retailer announced last month that for the next five years it will focus more in the emerging markets like China, India and Brazil.