Walmart restarts talks on UK unit - Northwest Arkansas Democrat-Gazette

Walmart Inc. has resumed talks with potential investors interested in acquiring a stake in Asda, the retailer's U.K. supermarket chain, the company said Monday.

Walmart confirmed in February that it was talking with a few third-party investors interested in Asda. But in April, the Bentonville-based retailer put the bidding process on hold to allow Asda to focus on serving customers and supporting employees through the covid-19 pandemic.

"Asda has a clear strategy and a long heritage of delivering value for customers and with this in mind, we believe now is the right time to explore options for a third party to invest in our business and accelerate the long-term delivery of our value strategy, both in stores and online," Walmart said in a statement Monday.

The company said, though, that "there is no certainty that a transaction will happen and we will not be providing any further comments on these discussions."

Walmart's hesitancy is likely attributable in part to its failed attempt in 2018 to sell Asda to rival Sainsbury's in a deal worth about $9.4 billion based on currency exchange rates at the time.

In April 2019, regulators in Britain rejected the proposed sale, saying the merger of the supermarket giants would reduce competition. That would result in higher prices, less product choice for shoppers and a poorer overall shopping experience, the Competition and Markets Authority said in its ruling.

Judith McKenna, chief executive officer of Walmart International, said after the deal's collapse that Walmart would continue to support Asda as a strong U.K. retailer.

Rumors persisted, though, that Walmart was still seeking a buyer for Asda. Walmart was also reportedly considering an initial public stock offering for Asda after the Sainsbury's deal was blocked.

Asda, which has 631 stores throughout the U.K., had a 13.9% grocery market share as of June 14, according to industry data from research firm Kantar. That put it in third place behind Tesco, with 26.9%, and Sainsbury's, which had 14.9%.

All the top chains have lost market share over the past year as shoppers have increasingly turned to discounters such as Lidl and Iceland, according to a recent Kantar report.

Walmart acquired Asda in 1999 for about $10 billion, in what was its largest transaction until May 2018 when it bought a majority stake in Indian e-commerce firm Flipkart Group for $16 billion.

As the world's largest retailer by revenue, Walmart operates about 11,500 stores in 27 countries and e-commerce websites in 10 countries. It employs about 2.2 million people worldwide.

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