Asda is being put up for sale by Walmart as new plan unveiled following merger collapse

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91
13 shares, 91 points
Asda is being put up for sale by Walmart as new plan unveiled following merger collapse

According to reports, bosses at the company are in preliminary talks to sell a controlling stake in the company to private equity funds. Walmart also stated it “firmly believes” listing the supermarket in the stock market is “an attractive long-term objective for ASDA”.

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

The US company has been attempting to sell ASDA for two years.

Although they are attempting to sell a large stake, the US company would still retain a minority stake.

Following Walmart’s failed merger with Sainsbury’s last April, the US company has stated publicly listing the ASDA is a possible long-term avenue.

The company added: “Walmart firmly believes that an IPO stock market listing is an attractive long-term objective for Asda.

“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.

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.'”

Walmart was blocked from its £12billion merger with Sainsbury’s last year by the Competition Commission. 

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Caroline Normand, Which? Director of Advocacy, said at the time: “The CMA is right to block this merger, which could have reduced competition in the sector resulting in a number of problems for shoppers including increased prices, reduced quality and choice, and a poorer shopping experience.

“Sainsbury’s and Asda have fallen behind the pack recently in this trusted sector – with both finishing in the bottom four of our annual supermarket survey as rivals like Aldi and Lidl have done a better job of giving shoppers what they want.”

In conclusion, the CMA said it was their “responsibility to protect millions of shoppers”.

“It’s our responsibility to protect the millions of people who shop at Sainsbury’s and ASDA every week.

“Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.

“We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”

 


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91
13 shares, 91 points

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