Walmart sells Japanese retailer Seiyu to investment company KKR and e-commerce company Rakuten. The company, which is headed by the Belgian Lionel Desclée, has been for sale for some time now.
The deal, which values Seiyu a 172.5 billion yen (1.39 billion euro), follows earlier rumours that Walmart wanted to leave Japan. KKR now acquires 65% of the Japanese supermarket chain, reports The Guardian. Rakuten, which already has an online partnership with Seiyu, will acquire 20% of the shares while Walmart itself retains a 15% minority stake.
The Seiyu deal is Walmart's latest divestment of underperforming assets, following its exit from, among others, the UK (Asda) and Argentina. In this way, the retailer wants to free up money for initiatives in growth markets such as China (Sam's Club) or India (Flipkart). The largest retailer in the world entered the Japanese market in 2002. The company then took a 6% stake in ailing Seiyu, and systematically expanded that participation in the following years. In 2008, Walmart finally took over the entire company.
Two years ago, Japanese media reported that Walmart wanted to sell Seiyu, which operates around 330 supermarkets, for 300-500 billion yen (2.4-4 billion euro). Apparently, however, that price was far too high, because no progress was made. At the beginning of last year, Walmart appointed Lionel Desclée as the new CEO of its Japanese subsidiary.
The fact that a buyer was found after all – albeit at a much lower price – may also have to do with Seiyu's better results and prospects. In 2019, Walmart's Japanese branch recorded a modest net profit of 47 million yen (380,000 euro), whereas the company had almost continuous red numbers in previous years. Seiyu also indicated earlier in the year that the corona pandemic had boosted interest in online shopping in Japan. Since 2018, the retailer has been working with Rakuten in this area.