Costco Wholesale Corporation plans to buy out its joint venture partner Comercial Mexicana’s 50 per cent stake in its Mexican unit for 10.7 billion pesos ($766.79 million) and take full control of the business in its third-largest market. The joint venture, Costco Mexico, which is operated by Costco Wholesale, will pay a cash dividend of about 4.8 billion pesos ($343.98 million), to be split equally between Costco and Comerci, as the Mexican retailer is locally known. Costco will use the dividend to fund the purchase. Shares of Comerci, which has been struggling under a heavy debt load, surged on the news and closed up 11.6 per cent, their biggest one-day per centage jump since October 2009. Comerci, which operates the upscale City Market stores, discount stores and restaurants, agreed to a debt restructuring deal with creditors in 2010 after heavy losses on currency derivatives caused it to default on obligations in late 2008. The company plans to use most of the cash payment from the transaction to pay off debt, Chief Financial Officer Jose Calvillo told analysts on a call. The Costco-Comerci relationship dates back to the early 1990s when Costco merged with Price Co, with which Comerci had a joint venture partnership. The deal is subject to approvals from the Mexican Federal Competition Commission and shareholders of Comercial Mexicana, the companies said in a statement. Shareholders and authorities should sign off on the deal shortly, Calvillo said, adding that Comerci expects to receive its payments in July and August and begin refinancing its debt in September. Jaime Gonzalez Solana will continue as CEO of Costco Mexico. Issaquah, Washington-based Costco operates 32 outlets in Mexico, its third largest market after the United States and Puerto Rico and Canada. The cash payments will allow Comerci to open more stores and ramp up sales. The company will seek to increase revenue by 8 per cent in 2013 and 10 per cent in 2014 and beyond, he said. When analysts on the call asked whether those were conservative targets, Calvillo explained it is becoming hard in Mexico’s competitive market to open stores rapidly.from gulf today.