Walmart has agreed to sell a majority stake in Seiyu to investment firm KKR and ecommerce company Rakuten, in a deal that values the Japanese supermarket chain at ¥172.5 billion (approximately $1.6 billion).
The deal will reportedly enable the acceleration of Seiyu’s digital transformation to become Japan’s leading omnichannel retailer. It is the latest divestiture of assets by Walmart, following its exits in Britain – with the sale of Asda – Argentina and South Korea. According to Reuters, the chain has struggled in Japan due to tough competition.
Under the terms of the agreement, KKR will purchase a 65% stake, while Rakuten – which has an existing online joint venture with the retailer – will acquire a 20% stake through its newly created subsidiary, Rakuten DX Solution. Walmart will retain a 15% stake in the company.
Established in 1963, Seiyu is a nationwide supermarket chain in Japan with more than 300 retail units. Walmart first entered the Japanese market in 2002 by buying a 6% stake in Seiyu and built up its stake before a full takeover in 2008.
The new ownership structure will mean Seiyu will benefit from accelerated investment in digital channels to facilitate app-based shopping, payment and delivery services; the introduction of new options for cashless payment; and enhanced product offering at low prices.
“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,” said Judith McKenna, president and CEO of Walmart International.
Hiro Hirano, co-head of Asia Pacific Private Equity and CEO of Japan at KKR, added: “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 digitalisation.”
The transaction is subject to regulatory approvals and expected to close in the first quarter of 2021.
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