Walmart in talks to sell a stake in Asda

US retail giant Walmart has revealed it is in talks to sell some of its stake in its UK subsidiary, supermarket Asda.

Walmart had previously admitted that it was considering floating the UK retailer on the stock-market in order to strengthen its long-term success, but in a joint statement with Asda last week, the two companies said Walmart was considering selling part of the business to a third party investor.

It comes after the Competition and Markets Authority (CMA) in the UK blocked the proposed Sainsbury/Asda merger in April last year, saying UK consumers would be worse off if the two giant retailers combined forces. The deal, announced a year earlier, would have seen the creation of a ‘transformational‘ retail group worth around £1.3 billion, with Sainsbury’s becoming a subsidiary of Walmart.

The statement said that Walmart “firmly believes that an IPO is an attractive long-term objective for Asda”, but following interest, it was considering whether there was an opportunity for a third part to invest alongside the parent company to support Asda’s growth -and was in talks with a number of interested parties.

“Asda is a great business with a clear strategy for the future and Walmart is committed to ensuring it has the resources and support it needs to deliver that strategy.” it said.

“Following inbound interest Walmart and Asda can confirm that we are currently considering whether there is an opportunity for a third party to invest in Asda, alongside Walmart, in order to support and accelerate the delivery of Asda’s strategy and position Asda for long term success.

“Together, we are in discussions with a small number of interested parties who share Walmart and Asda’s commitment and passion to growing the business – and who share our values, both for our customers and colleagues.”

It said that no decisions have been made and it would not comment further on these discussions.

“If or when we decide to pursue this opportunity further our first priority will be to share more detailed information with our colleagues,” it concluded.

The company said it had a “clear” international strategy for ‘strong local businesses, powered by Walmart, which involves “a number of different ownership arrangements depending on the needs of its different markets”.

In December, the UK supermarket opened its first cash and carry style warehouse under the new fascia, Deal Depot, which included a selection of more premium wines.