Yoshinoya plans to rope in Don steak restaurant chain

Yoshinoya Holdings Co. plans to gain control of Don Co., Japan's biggest steak restaurant chain, via a series of share transactions, sources said Wednesday.

Yoshinoya, known for its "gyudon" beef-on-rice chain, envisions producing synergy effects by combining Don's steak restaurants with the gyudon operations, the sources said.

Don and Yoshinoya have entered final talks over the deal, they said. Yoshinoya envisages purchasing new Don shares to recapitalize the firm, which is languishing under a negative net worth.

Following the acquisition of the new Don shares, Yoshinoya will consider increasing its stake to more than 50 percent, they said.

Don is listed on the second section of the Osaka Securities Exchange.

Yoshinoya thinks it can benefit by implementing joint procurement of U.S. beef with Don and cutting back on distribution costs, the sources said.

Yoshinoya President Shuji Abe earlier said the company wants to operate a full range of restaurant chains. Yoshinoya also runs the Kyodaru sushi chain and the Hanamaru "udon" noodle chain.