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Walmart to sell majority stake in Brazil operation

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Division operates about 465 stores, employs 65,000

BENTONVILLE, Ark. — Walmart on Monday said it has sold a majority stake in its Brazilian operations to a private equity firm. The move is the second pullback from an international market this year for Walmart, which in April announced that it would merge its ASDA division in the United Kingdom with supermarket rival J. Sainsbury PLC, and retain a minority stake in the combined retailer.

Advent International, a global private equity firm with decades of experience in Brazil, will acquire 80% of Walmart Brazil  (known locally as Walmart Brasil), leaving Walmart with the remaining 20% upon the completion of the transaction, which is subject to regulatory approval in Brazil.

“We have been in Brazil for over 20 years and are excited about this partnership with one of the country’s leading retailers,” said Patrice Etlin, a managing partner at Advent International in Brazil. “We believe that with our local market knowledge and retail expertise we can position the company to generate significant results and reach new levels of success in Brazil. We plan to invest in the business, work with the Walmart Brazil management team, associates, Walmart and our industry advisors to create a more agile and modern company to accelerate its development and improve the customer experience.”

Since opening of its São Paulo office in 1997, Advent International has invested in 30 Brazilian companies from various sectors. Advent has been active in the retail, consumer and leisure segments worldwide for 28 years and has completed 75 investments in 22 countries.

“Walmart is committed to building strong, resilient businesses that continuously adapt to local customers’ needs in a rapidly changing world,” said Enrique Ostale, executive vice president at Walmart and CEO of the retailer’s Walmart UK, Latin America and Africa division. “We will retain a stake in Walmart Brazil and continue to share our global retail expertise, giving our Brazil business the best opportunity for long-term growth, providing opportunities for associates and low prices for customers.”

Walmart said the decision came after a “thoughtful and deliberate review” of its international portfolio. The company said it will take a $4.5 billion, non-cash charge due to the transaction in the second quarter. Other terms of the deal were not disclosed.

Moody’s retail analyst Charlie O’Shea called the deal credit positive, saying that it would allow Walmart to invest in markets with greater potential. Last month Walmart announced that it had taken a 77% stake in Flipkart, India’s largest online retailer.

Walmart opened its first stores in Brazil in 1995. The division now comprises about 465 stores, operating under such banners as BIG, Bompreço, Hiper Bompreço, Magazine, Maxxi, Mercadorama, Nacional, Sam’s Club, Supermercado Todo Dia, TodoDia, Walmart and Walmart Posto. The company said it employs about 65,000 in Brazil.

 


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