Walmart to sell majority stake in Japanese supermarket chain

Walmart to sell majority stake in Japanese supermarket chain
Image: Courtesy of Walmart

Walmart announced that it has signed a definitive agreements to sell a majority stake in Seiyu, a supermarket chain in Japan with more than 300 retail units, to KKR and Rakuten for ¥172.5 billion (approx. $1.6 billion).

Under the terms of the agreements, KKR will acquire a 65% stake in Seiyu, and Rakuten will acquire a 20% stake, through a newly created subsidiary focused on retailer digital transformation.

Walmart will retain a 15% stake in Seiyu and work with KKR and Rakuten to accelerate Seiyu’s digital transformation to become Japan’s leading omnichannel retailer.

”The new ownership structure enables Seiyu to take advantage of KKR, Rakuten and Walmart’s combined retail expertise and innovation as a standalone company and accelerate its digital transformation to further benefit both Seiyu’s customers and business partners,” said in the statment.

READ ALSO : Walmart agrees to sell UK business Asda for £6.8bn

Seiyu CEO Lionel Desclee will continue to lead the business through a transition period, after which he will take on a new role within Walmart. A new Board of Directors comprised of representatives from KKR, Rakuten and Walmart will be formed to focus decision making locally and plans to appoint a new CEO following the close of the transaction.

“This past year has been one of the most extraordinary in Seiyu’s rich 57-year history. Our associates have been exceptional, adapting brilliantly to serve customers at a time when they needed it most and outperforming against an ambitious transformation plan. We have been proud investors in this business over the past 18 years, and we are excited about its future under the new ownership structure. Today’s announcement is important because its focus is on bringing together the right partners in the right structure to build the strongest possible local business. We look forward to supporting Seiyu’s growth and success, alongside KKR and Rakuten, as a minority investor,” said Judith McKenna, President and CEO of Walmart International.

Hiro Hirano, Co-Head of Asia Pacific Private Equity and CEO of Japan at KKR, said, “KKR is pleased to invest in the success of Seiyu given the important role it plays in the lives of customers across the country. We will focus on working closely with Seiyu’s management team and associates and leveraging the expertise of Rakuten and Walmart to enhance the customer experience, meet their ever-changing needs, and make shopping more accessible through digitalization.”

KKR is making its investment from its Asia private equity fund. The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2021.