Walmart resumes Asda sale talks

Tue, 21 Jul 2020 | BUSINESS SALE

American grocery giant Walmart has said it has revived talks over a potential sale of its UK supermarket chain Asda. Walmart was previously seeking to sell Asda, as we reported here, before these plans were put on hold to allow the company to navigate the COVID-19 pandemic.

At the time, Apollo Global Management, Lone Star Funds and TDR Capital (reportedly working with EG Group on its bid) were all reported to have submitted first round offers and been invited to the next bidding stage of a deal that would potentially have valued Asda at over £7 million.

In a statement, Walmart said: “Walmart and Asda have restarted conversations with a small number of third-party investors who are interested in acquiring a stake in Asda and partnering with Walmart, following renewed inbound interest.”

“Now is the right time to explore options for a third party to invest in our business to accelerate the long-term delivery of our value strategy, both in stores and online.” The company added that there was “no certainty that a transaction will happen”.

The company added that the COVID-19 pandemic had "demonstrated Asda's resilience and the key role we play in supporting different communities".

Walmart has been seeking to scale back its UK presence for several years as it looks to refocus on high-growth international markets such as India. Last year, a proposed merger of Asda, which Walmart acquired for £6.7 billion in 1999, with J Sainsbury was blocked by the UK’s Competition and Markets Authority.

Asda has 639 UK outlets, including 340 superstores. It has suffered disappointing sales over recent years, as the success of discount supermarkets Aldi and Lidl have threatened its status as the discount option among the UK’s “Big Four” supermarkets, alongside Tesco, Sainsbury’s and Morrisons.

In its most recent accounts, to the year ending December 31 2018, Asda reported profits of £391 million, up £90 million from a year earlier, with total assets valued at close to £5.5 billion.

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