Walmart Inc. reached an agreement Friday to sell its underperforming grocery business in the United Kingdom for around $8.8 billion.
Walmart will sell the U.K. operations, known as ASDA, to a group of private equity buyers lead by TDR Capital and EG Group founders Mohsin and Zuber Issa, for an enterprise value — which includes group debts — of £6.8 billion.
Walmart said it will retain an unspecified equity stake in the U.K. business, as well as a seat on the ASDA board once the transaction is complete.
“At a time of evolution in the UK food retail sector, the new owners will continue to build a strong and successful business, benefiting from fresh capital and expertise, as well as valuable links with the world’s largest retailer,” Walmart said in a statement. “The Issa brothers, backed by TDR Capital, will support and accelerate Asda’s existing strategy, which is anchored in delivering low prices and convenience to customers however they want to shop.”
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“Under the new ownership, Asda will continue to work closely with suppliers to provide best value ranges for customers in the categories that matter most to them,” the statement added.
Walmart shares were marked 0.54% lower, a much smaller decline than for the benchmark Dow Jones Industrial Average following news of the positive coronavirus test for President Donald Trump, to change hands at $142.22 each.
Walmart purchased ASDA, a centuries-old British retailer based in Yorkshire, for £6.7 billion in 1999 as it executed its expansion to markets outside of the United States in its drive to become the world’s largest retailer, but has found life difficult in the intensely competitive U.K. grocery market.
An attempt last year to merge the group with Sainsbury’s, the number two food retailer in Britain behind Tesco Plc, was blocked by competition regulators, accelerating Walmart’s desire to retreat from the market heading into the deadline by which Britain will leave the European Union.
This article was originally published by TheStreet.