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Note the date of this is Dec., '07

MEXICO CITY, Dec 6 (Reuters) - Retailer Soriana said on Thursday it was buying more than 200 stores from a smaller Mexican rival for $1.35 billion, nearly doubling its supermarkets and challenging market leader Wal-Mart.

Soriana (SORIANAB.MX: Quote, Profile, Research, Stock Buzz) agreed to buy 199 stores in Mexico and seven outlets in Los Angeles from Gigante, tapping the U.S. market for the first time.

With the acquisitions, Soriana, the No. 2 Mexican supermarket chain, will approach the scale of market leader Wal-Mart de Mexico (Walmex) (WALMEXV.MX: Quote, Profile, Research, Stock Buzz) and will gain more negotiating power with suppliers.

Soriana shares ended among the top gainers on the Mexican bourse, rising 6.12 percent to 33.65 pesos.

"This is a really good acquisition for Soriana, very strategic, and it boosts its presence in Mexico City," said analyst Marisol Huerta with Actinver brokerage. "It strengthens it to face up to the competition from Walmex."

Gigante (GIGANTE.MX: Quote, Profile, Research, Stock Buzz) shares were halted on the Mexican stock exchange for much of Thursday after soaring 14 percent. The suspension was lifted after the session ended.

Gigante said most of the 25,000 employees at the Mexican supermarkets it is selling Soriana will keep their jobs as part of the deal.