SM Investments Corp. and the Waltermart Group of Companies formed a joint venture to boost the two companies’ retail businesses amid the heavy competition posed by Lucio Co-owned Puregold Price Club Inc.

SM Investments said in a disclosure to the stock exchange the agreement was entered through its subsidiaries SM Retail Inc. and SM Prime Holdings Inc.  No other details were provided.

SM Prime chief finance officer Jeffrey Lim said in a text message the agreement was still subject to due diligence.  “We have signed joint venture with Waltermart subject to due diligence and further negotiations,” he said.

Waltermart, which is owned by the Lim family, is in shopping mall and supermarket businesses. Waltermart has 17 malls in Batangas, Laguna, Cavite, Metro Manila, Bulacan, Pampanga and Nueva Ecija.

The Lim family also owns Abenson, a chain of appliance stores with over 75 outlets nationwide as well as a concept store called Avant, Electroworld and Home Plus.

SM Retail had 193 retail stores, consisting of 46 SM department stores, 37 SM supermarkets, 34 SM hypermarkets and 76 SaveMore stores as of end-September 2012.

SM Retail reported a net income of P4.1 billion in the first nine months of 2012, up 6.7 percent as sales increased 8.7 percent to P110.8 billion.

Puregold reported last week it would likely have 200 stores by 2014 with the opening of 25 stores this year and another 25 stores next year.

Puregold had 156 stores including six S&R Shopping Centers as of end-2012.

Puregold said it was also in talks with various parties for possible acquisition.

Lucio Co-owned supermarket chain has been aggressive with its store expansion and is now venturing in Mindanao with the opening of Puregold store in Cagayan de Oro and S&R Shopping Center in Davao City this year.