By YURI KAGEYAMA, A.P. Business writer
TOKYO (AP) – US retailer Walmart is selling 85% of its wholly owned Japanese supermarket subsidiary Siu while retaining a 15% stake in the deal valued at 172.5 billion ($ 1.6 billion), the companies said on Monday.
KKR & Co, a global investment firm, will buy a 65% stake, while Japanese online retailer Rakuten will acquire a 20% stake from Walmart, he said in a statement.
According to the statement, KKR and Rakuten will bring their expertise in e-commerce and global digital marketing to strengthen Siu in the era of rapid digital shopping.
Siou’s head Lionel Desile will continue to lead in the transition period, after which he will play a new role at Walmart, the world’s largest retailer.
A board will be set up, which will appoint representatives from KKR, Rakuten and Walmart and appoint a new CEO, the companies said.
The transaction is expected to close in the first quarter of 2021, subject to regulatory approval.
Bentonville, Arkansas-based Walmart, which also operates stores in Europe and other parts of Asia, entered the Japanese market in 2002 with the purchase of a small stake in Siu, bringing its “every day low price” to Japan Promises. Siu became Walmart’s group company in 2008.
The Japanese retail market has often proved to be a challenge for foreign players, and the arrival of Walmart was met with skepticism from the start.
Japanese shoppers take advantage and often look for cheap or poor quality products. But that trend has changed rapidly, and discount stores are becoming increasingly popular as more Japanese seek out bargains.
The other hot trend in the entire world is leading to online shopping, a shift that is accelerated amidst the coronovirus epidemic.
Rakuten and Walmart are already collaborating, including online shopping and eBook-service support.
“We look forward to accelerating the digital transformation of Siu brick and mortar retail and merging the best in offline and online retail,” Kazunori Takeda, a senior executive of Rakuten, said in a statement.
Seiyu will continue to have access to Walmart’s global sourcing for products. Scale, in theory, lowers prices.
Established in 1963, Siu has over 300 stores across Japan employing over 34,000 people. With revenues of $ 524 billion in fiscal year 2020, Walmart employs more than 2.2 million “associates”, as its activists are called, worldwide. In the US, Walmart’s online sales are flourishing during the epidemic, but are still running second to Amazon in that area.
Yuri Kagyama is on Twitter https://twitter.com/yurikageyama
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