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Walmart puts Asda stake sale on hold

Shoppers gather outside an ASDA store from 5.45am on March 19, 2020 in Cardiff, United Kingdom.

Matthew Horwood | Getty Images

Walmart has paused efforts to sell a majority stake in U.K. grocer Asda, so it can direct full attention to managing the business as the coronavirus pandemic creates massive spikes in demand for groceries, according to people familiar with the matter.

The people requested anonymity because the negotiations are confidential. A spokesperson for Walmart declined to comment.

Asda had attracted significant interest from private equity firms, which were eyeing the grocer at a valuation of as much as $9 billion, the people said. It could not be immediately determined when Walmart might resume the sale, but it is not in a rush, a person familiar with the matter told CNBC. Its focus now is on freeing its leadership team up to run the business.

The pause in the sale process highlights the unprecedented landscape in which grocery stores are operating, with shoppers buying in bulk and putting pressure on supply chains as consumers shelter in place and avoid social contact in a bid to halt the spread of the coronavirus. In the U.S., major grocers have expedited their hiring processes to help deal with that demand. 

Walmart plans to hire 150,000 employees to keep up with demand. The retailer had hired nearly 50,000 employees as of late Monday, and it’s been averaging about 5,000 new hires a day, said Dan Bartlett, Walmart’s executive vice president of corporate affairs.

The coronavirus pandemic has rattled businesses and populations worldwide. In the United Kingdom,  there were more than 34,000 confirmed cases as of Thursday afternoon, according to Johns Hopkins University. U.K. Prime Minister Boris Johnson himself has tested positive for the virus. 

In hopes of containing the virus, Johnson announced nationwide lockdown measures last month, telling cafes, bars and restaurants to close.

Walmart has been assessing its Asda business for years.  Last year, Britain’s competition regulator blocked its proposed sale of Asda to Sainsbury. The parties ultimately terminated the agreement. The attempted sale was one of several steps it took to reorient its international footprint, which also included selling a majority stake in Walmart Brazil and buying a majority stake in Indian e-commerce company Flipkart. 

— CNBC’s Melissa Repko contributed to this report


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