Itochu Corp to begin talks to buy am/pm Japan - Nikkei

June 24 (Reuters) - Japanese trading company Itochu Corp (8001.T: Quote, Profile, Research) will negotiate with Rex Holding Co to buy am/pm Japan Co, a month after Lawson Inc (2651.T: Quote, Profile, Research) scrapped its plan to buy the smaller rival, the Nikkei business daily reported.

Lawson, Japan's second-largest convenience store chain, dropped its bid for am/pm Japan Co last month after a dispute over brand names.

Following the breakdown of talks with Lawson, Rex Holdings has begun a fresh search for a buyer of am/pm Japan, the Nikkei said, without citing sources.

Itochu is ready to begin due diligence to assess am/pm Japan's assets, the paper said, adding that the company expects the deal to create synergy with FamilyMart and boost its bargaining power in procuring merchandise from suppliers.

If the deal goes through, Itochu's convenience store business, which includes about 7,400 outlets operated by Japan's third-largest convenience store chain FamilyMart Co Ltd (8028.T: Quote, Profile, Research), will expand to about 8,500.

Lawson has a network of about 8,600 stores. Industry leader Seven-Eleven Japan Co, which is a unit of Seven & I Holdings (3382.T: Quote, Profile, Research) has about 12,000 stores.

Rex Holdings, however, may harbor other plans, as it has approached investment funds and drugstore chains as well for a possible deal, the Nikkei reported. (Reporting by Shradhha Sharma in Bangalore; Editing by Ratul Ray Chaudhuri)