Aeon in talks to acquire more shares of drugstore chain Tsuruha

Retail giant Aeon says it is in talks to acquire more shares in Tsuruha Holdings in a deal that could lead to the formation of Japan's largest drug store alliance.

Aeon already owns more than 50 percent of Japan's largest such chain, Welcia Holdings. Making Tsuruha an affiliate would help Aeon form a drug store alliance with sales totaling about 2 trillion yen, or over 13 and a half billion dollars.

Aeon on Monday announced the start of exclusive negotiations with Oasis Management. That's a Hong Kong-based investment fund that owns a 13 percent stake in Tsuruha.

Aeon also currently has a more than 13 percent stake in Tsuruha. Officials at the retailer say they are hoping to strengthen relations with the chain.

They say they are discussing details of the acquisition such as the number of shares, price and timing.

Forming a larger drug store alliance could help Aeon compete with rival chains.