Walmart Nearly Exits Japan After Selling Majority Stake In Seiyu

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    Walmart Almost Exits Japan After Selling Majority Stake In Seiyu

    TOKYO: Walmart Inc is offering a bulk stake in Japanese supermarket chain Seiyu to investment firm KKR and e-commerce company Rakuten for over $1 billion, after suffering years of poor success amid stiff competitors.

    The deal, which values Seiyu at 172.5 billion yen ($ 1.65 billion) consisting of debt, comes after on-off speculation about the world’s most significant retailer looking to exit Japan. It is listed below the 300-500 billion yen it reportedly sought a few years back.

    KKR will buy 65% of Seiyu and Rakuten will obtain a 20% stake while Walmart will keep 15%, the companies said in a joint statement on Monday.

    Walmart first entered the Japanese market in 2002 by purchasing a 6% stake in Seiyu, and gradually developed its stake before a complete takeover in 2008.

    However it has had a hard time in Japan, like other foreign entrants such as Tesco PLC and Carrefour SA who were tempted by the high costs power of Japanese consumers but were annoyed by tough competition.

    The Seiyu offer is the current divesture of underperforming assets by Walmart, following its exits in Britain and Argentina, as it had a hard time to take on nimble regional rivals.

    In Asia, it took out of South Korea in 2006 and shifted focus in China to expanding members-only warehouse chain Sam’s Club as competitors from online markets such as Alibaba heightened. Walmart is broadening in India, however, with its $16 billion purchase of ecommerce service provider Flipkart.

    Japanese media reported 2 years ago that Walmart was looking for to offer Seiyu for around 300 billion to 500 billion yen. Sources said at the time that it stopped working to find a buyer.

    Attending to reports that it was aiming to leave Japan, Walmart revealed last year that it aimed to list Seiyu and keep a majority stake in the business.

    But Monday’s statement also comes as Seiyu is starting to show signs of enhancement, with its reasonably early start in e-commerce finally yielding outcomes, helped by a 2018 collaboration with Rakuten.

    Walmart Japan, mainly the Seiyu company, scheduled a net earnings of 47 million yen in 2019 after reporting losses in the majority of previous years. Seiyu told Reuters previously this year that the coronavirus pandemic had strengthened interest in online grocery shopping in Japan.

    For Rakuten, the offer with Seiyu assists it contend against rival Amazon. Large Japanese supermarkets such as Aeon Co Ltd and Seven & I Holdings Co Ltd’s Ito-Yokado have likewise been stepping up their investments in e-commerce as Japanese consumers, long wary of buying food online, are starting to use online grocery services.

    Disclaimer: This post has actually been auto-published from a firm feed without any adjustments to the text and has not been examined by an editor

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    ( the headline, this story has not been published by Important India News personnel and is released from a syndicated feed.).

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