Walmart to sell 85% stake in Japanese supermarket chain Seiyu to KKR and Rakuten

Walmart has agreed to sell a stake of 85% in Seiyu, a Japanese supermarket chain, to KKR and a subsidiary of Rakuten, for a combined price of over $1 billion.

The US retailing giant will retain a stake of 15% in Seiyu.

The deal value 100% of the Japanese supermarket business at ¥172.5 billion (approximately $1.6 billion).

Founded in 1963, Seiyu has more than 300 retail units across Japan.

Seiyu, through its supermarket and hypermarket formats and also Rakuten Seiyu Netsuper delivery service, provides a range of fresh food, general merchandise, and apparel products.

Judith McKenna – President and CEO of Walmart International said: “This past year has been one of the most extraordinary in Seiyu’s rich 57-year history. Our associates have been exceptional, adapting brilliantly to serve customers at a time when they needed it most and outperforming against an ambitious transformation plan.

“We have been proud investors in this business over the past 18 years and we are excited about its future under the new ownership structure. Today’s announcement is important because its focus is on bringing together the right partners in the right structure to build the strongest possible local business.”

KKR, which is a private equity firm, will acquire a 65% stake in Seiyu by investing from its Asia private equity fund.

On the other hand, Rakuten will buy a 20% stake, which will be via a newly created subsidiary that will be focused on retailer digital transformation.

Rakuten is a Japan-based electronic commerce and online retailing company.

Walmart to divest 85% stake in Japanese supermarket chain Seiyu to KKR and Rakuten. Photo courtesy of Walmart Inc.

The new ownership structure will help Seiyu to benefit from the combined retail expertise and innovation of KKR, Rakuten, and Walmart and innovation as an independent company. Besides, it will speed up its digital transformation to further benefit its customers and also business partners.

Hiro Hirano – Co-Head of Asia Pacific Private Equity and CEO of Japan at KKR, said: “We will focus on working closely with Seiyu’s management team and associates and leveraging the expertise of Rakuten and Walmart to enhance the customer experience, meet their ever-changing needs, and make shopping more accessible through digitalization.

“This investment is a true milestone for KKR in Japan and reinforces our commitment to the market as well as our continuing efforts to champion the long-term success of local businesses.”

The deal, which is subject to regulatory approvals, is anticipated to be wrapped up in Q1 2021.

Earlier this month, Walmart signed a deal to divest Walmart Argentina, its business in Argentina, to Latin American group Grupo de Narváez.