The company has operated in Brazil, its sixth biggest overseas market, for 23 years
Walmart has announced the sale of a majority stake in its Brazilian business to private equity investor Advent International.
The personal care retail giant will retain the remaining 20% share in the company after the deal closes.
The deal, which will result in a net loss of approximately US$4.5bn, follows the results of a “thoughtful and deliberate” review of Walmart’s international portfolio.
Enrique Ostale, EVP and CEO of Walmart UK, Latin America and Africa, said: “Walmart is committed to building strong, resilient businesses that continuously adapt to local customers’ needs in a rapidly changing world.
“We will retain a stake in Walmart Brazil and continue to share our global retail expertise, giving our Brazil business the best opportunity for long-term growth, providing opportunities for associates and low prices for customers.”
Advent International, which has operated in Brazil for over 20 years, is poised to turn the Walmart Brazil business into a more “agile and modern company” and improve the customer experience.
Patrice Etlin, a Managing Partner at Advent International in Brazil, added: “We believe that with our local market knowledge and retail expertise we can position the company to generate significant results and reach new levels of success in Brazil.
“We plan to invest in the business, work with the Walmart Brazil management team, associates, Walmart and our industry advisors to create a more agile and modern company to accelerate its development and improve the customer experience.”
Speculations of a sale have been circulating for some time.
Bloomberg reported that Brazil had been “more of a nightmare” for Walmart than “an intense dream”, as the country’s national anthem promises.
It stated that Walmart Brazil “couldn’t match French retailers Carrefour SA and Casino Guichard-Perrachon SA, the top two players there” and that its history in the Latin American market shows a “disjointed, money-losing unit that struggled to connect with consumers”.RBC Capital Markets Analyst Scot Ciccarelli said in a note: “Walmart has struggled in the Brazil market for many years.” He added that the deal allows Walmart to get “out of one of its most problematic regions.”