close_game
close_game

Walmart is seeking up to $3.74 billion in sale of JD.com stake

Bloomberg |
Aug 21, 2024 08:08 AM IST

The envisioned deal comes as Walmart refines its strategy in the world’s second-largest economy, where retail is dominated by online platforms such as Alibaba.

Walmart Inc. is seeking to raise as much as $3.74 billion by selling its stake in Chinese e-commerce firm JD.com Inc., ending an eight-year partnership in a key retail arena now plagued by an economic downturn and intense competition.

The logo of Walmart is seen on a pole outside a store in Mexico City, Mexico June 14, 2024. REUTERS/Henry Romero(REUTERS)
The logo of Walmart is seen on a pole outside a store in Mexico City, Mexico June 14, 2024. REUTERS/Henry Romero(REUTERS)

The US retailer is offering 144.5 million shares in a $24.85 to $25.85 price range, people familiar with the matter said. Morgan Stanley is the broker-dealer handling the offering, they added, asking not to be identified because the information is private. That’s a discount of as much as 11.8% to Tuesday’s close, according to Bloomberg calculations.

JD.com’s Hong Kong-listed shares fell 11%. The envisioned deal comes as Walmart refines its strategy in the world’s second-largest economy, where retail is dominated by online platforms such as Alibaba Group Holding Ltd. and Temu-owner PDD Holdings Inc. The deal comes as a property crisis, market volatility and uncertain job prospects take a toll on Chinese consumption.

Read more: Reliance, Disney warned that $8.5 billion media merger could harm competition: Report

Representatives for Walmart, JD.com and Morgan Stanley didn’t immediately respond to requests for comment.

Walmart’s Sam’s Club has been a rare bright light for the company. In China, the unit offers premium goods with a membership model and has been a success in the supermarket business. However, the company’s other outlets are struggling as rivals chase cash-strapped shoppers. 

Last week, Alibaba — long a barometer for the industry — surprised investors when it revealed its main commerce business actually shrank in the June quarter. 

The consumer environment in general is worsening and growth is evaporating given the economic uncertainty. JD.com’s June-quarter results beat expectations — even though revenue grew a mere 1.2%. That extended a string of single-digit quarters dating back to 2022, a period of malaise that’s halved its market value since the start of last year.

The share sale would mark the end of a partnership between the two companies that started when Walmart acquired a 5% stake in the Chinese company in 2016. 

That deal also involved JD.com taking over Walmart’s Yihaodian online marketplace, which focused on selling groceries to higher-end female shoppers in major Chinese cities, the companies said then. Later that year, Walmart increased its holdings in JD.com to 10.8%.

Stay updated with the...
See more
Stay updated with the latest Business News on Petrol Price, Gold Rate, Income Tax Calculator along with Breaking News Events and Latest News Updates on Hindustan Times.
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Sunday, November 10, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On
// // //