Walmart Plans to Sell $1.6 Billion Stake in Seiyu
The sale of its 85% interest in the supermarket chain would almost completely divest Walmart’s interests in Japan.
US retail titan Walmart is selling a majority stake in Japanese supermarket chain Seiyu to investment firm KKR and eCommerce firm Rakuten after spending two decades attempting to break into the Japanese retail market.
The deal, announced on Monday, values Seiyu at 172 billion yen, or $1.65 billion. The price is well below the 300-500 billion yen Walmart reportedly sought to sell Seiyu for two years ago; Japanese media reports said that prospective buyers shied away from the figure.
KKR and Rakuten will purchase 65% and 20% of Seiyu respectively, while Walmart will retain 15%. Rakuten already has an online venture with Seiyu, which will continue after the purchase.
Walmart first entered the Japanese retail market in 2002 when it purchased a 6% stake in Seiyu, which it then built up to a full takeover in 2008. The supermarket chain operates around 330 stores nationwide, and has struggled to thrive in the competitive market – as have other retail companies based overseas, such as Carrefour and Tesco.
However, the chain looked to have been turning its fortunes around in 2019, reporting a net profit of 47 million yen despite making losses in most previous years. Its 2018 eCommerce partnership with Rakuten, enabling online grocery sales, also bolstered the business.
Kazunori Takeda, Rakuten’s group executive vice president, welcomed the deal in a statement. “We look forward to accelerating digital transformation of Seiyu brick and mortar retail, and further merging the best of offline and online retail,” he said.
The sale of Seiyu is Walmart’s latest divesture of underperforming assets in its overseas branches, having recently given up control of British supermarket chain Asda.
Walmart said that it expects a non-cash loss of around $2 billion after tax in its fourth fiscal quarter due to the sale of Seiyu.