Walmart Inc. is selling a majority stake in Japanese retailer Seiyu toKKR & Co. andRakuten Inc. in a deal the companies said values the business at 172.5 billion yen ($1.6 billion), as the U.S. giant seeks to boost the chain’s online presence.
Under the agreement, Walmart will keep a 15% stake in Seiyu, while KKR and Japanese e-commerce company Rakuten acquire a 65% and 20% stake, respectively, according to ajoint release from the companies. The deal is meant to shore up Seiyu’s digital operations with the aid of its new owners as demand for online retail grows in Japan.
Speculation has grown over the past several years that the Bentonville, Arkansas-based retailer was preparing to sell Seiyu, which the company repeatedly denied. A 2018 report in Nikkeisaid Walmart planned to sell the business for as much as 500 billion yen. In June last year, Walmart said it would seek to relist Seiyu.
The deal is expected to close in the first quarter of 2021. Seiyu Chief Executive Officer Lionel Desclee will stay in his role through the transaction and then take a new position within Walmart. A new chief executive will then be appointed by a new board comprised of executives from KKR, Rakuten and Walmart, according to the companies’ statement.
Walmart, which first invested in Seiyu in 2002 and took it private in 2008, has been investing in building up digital operations globally as it faces cost pressures and sluggish growth in its home market.
It has struggled to gain traction in Japan against local rivals like Aeon Co. and Seven & i Holdings Co. In 2018, it began working with Rakuten on fresh produce delivery in Japan and an e-book operation in the U.S. The U.S. giant has been reshaping its international operations to focus on high-potential markets like India and China.
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