Walmart in discussions to sell the stake in Asda

Walmart says it could sell a majority stake in Asda, its UK supermarket, after “incoming interest” in the idea.

The US retail giant said it spoke to a “small number of stakeholders” about a possible investment.

It comes after UK regulators blocked Walmart’s plan to merge Asda with Sainsbury last year for fear that it would raise prices for consumers.

Walmart said it would likely keep a stake in Asda if the plan goes ahead.

“No decisions have been made and we will not comment on these discussions further,” he said.

“If or when we decide to pursue this opportunity further, our first priority will be to share more detailed information with our colleagues.”

Walmart purchased Yorkshire-based Asda in 1999. The company is among the top three UK supermarkets, with an estimated 15% of the market.

However, in recent years, it has seen competition from low-priced German competitors such as Aldi and Lidl increase.

“Clear strategy”

After regulators blocked the Sainsbury merger, Walmart said it was considering a stock exchange listing for Asda.

On Wednesday, the company said it remained “an attractive long-term goal”.

“Asda is a large company with a clear strategy for the future and Walmart is committed to ensuring that it has the resources and support it needs to accomplish this strategy,” Walmart said in a statement.

Walmart has reviewed its international strategy in recent years, downsizing its business in countries such as Brazil and collaborating with local companies in the markets in which it sees growth.

In 2018, it acquired a majority stake in the Indian online retailer, Flipkart. He also has collaborations with the Chinese JD.com and the Japanese Rakuten.

“Walmart has a clear international strategy around” strong local businesses, powered by Walmart “, which involves a number of different proprietary agreements, depending on the needs of its different markets,” said the company.

A potential third-party investment in Asda would be intended to “support and accelerate the implementation of Asda’s strategy and position Asda for long-term success,” he said.

John Colley, associate dean of Warwick Business School, said: “Having put all their hopes into a merger with Sainsbury’s, Asda’s bosses struggled to find a plan B for the company.

“The company is clearly not desired by Walmart, which is faced with greater challenges such as Amazon’s threat.”

He said that a flotation had “always seemed unlikely”, but the idea suggested that Walmart had “struggled to find potential buyers at a price he found attractive”.

— Read on www.newsarchyuk.com/walmart-in-discussions-to-sell-the-stake-in-asda/