Walmart Sells its UK Supermarket Business in $10B Deal
Walmart is retreating from Europe, merging its U.K. supermarket business Asda with bigger rival Sainsbury's. In return, Walmart will receive £2.97 billion ($4.1 billion) in cash and a 42 percent stake in the combined business, the companies said in a statement on Monday. The deal values Asda at £7.3 billion ($10 billion), and creates a mega retailer with 2,800 stores and combined annual sales of roughly £51 billion ($70 billion). The combined business will be led by Sainsbury's chairman and chief executive. The CEO of Asda and two representatives from Walmart will join the company's board. The deal is expected to be completed in the second half of 2019.
Total Retail's Take: It will be interesting to see the next step Walmart takes following this merger with Sainsbury's. Many are speculating that the infusion of cash from the Sainsbury's deal will be funneled into Walmart's bid to acquire Flipkart, the largest online retailer in India. Walmart and Amazon.com have been in a public battle to acquire Flipkart, and it makes sense the proceeds from the Sainsbury's merger could be used to strenghen an offer for Flipkart. Walmart appears to be prioritizing the fast-growing e-commerce market in India over the much more established — and difficult — grocery sector in Europe. The takeaway is that Walmart realizes the potential growth opportunity that comes with owning Flipkart, and is going hard after it.