Walmart is planning to sell its British subsidiary Asda to Sainsbury’s for approximately $4.1 billion plus a 42% stake in the combined retailer, valuing Asda at approximately $10 billion in total. Walmart will then leverage its global scale and investment to continue supporting the business.
Following the merger, Sainsbury’s will operate several e-Commerce sites and more than 2,800 stores under banners including Sainsbury’s, Asda and Argos, generating a combined 47 million transactions weekly. The banners encompass supercenters, superstores, supermarkets, convenience stores and digital operations.
The combined business will be led by Sainsbury’s CEO Mike Coupe and CFO Kevin O’Byrne, while Asda CEO Sean Clark will continue running the Asda division. Two Walmart representatives will join the board as non-executive directors.
Sainsbury’s held 15.9% of the UK grocery market in the 12 weeks ending April 22, 2018, while Asda accounted for 15.5%, according to Kantar Worldpanel. Sainsbury’s market share was down 0.3 percentage points from the same period in 2017, while Asda was down 0.1 percentage points.
Walmart also is in talks to sell a majority stake in its Brazilian operations to private equity firm Advent International, reported Reuters, quoting people familiar with the situation. The retail giant had shuttered at least 10% of its Brazilian stores in 2016 after the international unit had posted operating losses for the previous seven years.
The deals could help Walmart fund its potential acquisition of Indian e-Commerce company Flipkart, which would value a 51% stake at $10 billion to $12 billion. Forrester Research Analyst Satish Meena noted the deal would help Flipkart sell groceries online, while being Walmart’s “best available option” for entering the Indian retail market.