Walmart Reportedly Halts Asda Sale Amid COVID-19 Grocery Surge

>

Walmart is pausing the sale process of Asda so that the UK-based grocer can focus on managing the surge in grocery orders driven by the coronavirus (COVID-19) pandemic, according to a report from CNBC.

The halt of the long-anticipated sale highlights the unprecedented landscape in which grocery stores are operating, with shoppers buying in bulk and putting pressure on supply chains to replenish the goods. Walmart, Kroger and Save A Lot are among grocers that have expedited their hiring processes to help deal with that demand, with Walmart planning to hire 150,000 employees.

Private equity firms Apollo Global Management, Lone Star Funds and TDR Capital each submitted first-round offers for Asda in early March and had been invited to join the next round of bidding. There’s currently no timetable for talks with bidders to restart. The price tag for Asda could be as high as $9 billion, the report said.

Walmart has been assessing the Asda business for years.  Last year, the UK’s chief competition regulator blocked its proposed $9.4 billion sale of Asda to Sainsbury’s. The parties ultimately terminated the agreement. The attempted sale was one of several steps Walmart took to realign its international footprint, which also included selling a majority stake in Walmart Brasil and buying a majority stake in Indian e-Commerce giant Flipkart for approximately $16 billion.

This isn’t the first massive potential retail deal the coronavirus has impacted. Seven & i Holdings Co., the Japan-based parent company of 7-Eleven, dropped its plan to acquire the Speedway convenience store and gas station chain for approximately $22 billion in March due to concerns over the coronavirus, according to a report by the Nikkei Asian Review.

Deal activity across all sectors has been hit by the virus-induced market turmoil, with the volume of mergers and acquisitions and investment deals sinking 23% to $383 billion in the U.S. this year compared with the same period in 2019, according to data compiled by Bloomberg.



Source link