Walmart, the world’s largest retailer, has agreed to sell Asda, its British supermarket chain, to a consortium of investors led by the private equity firm Elliott Management for $8.1 billion. The deal values Asda at about $10.1 billion, including debt.
The move comes as Walmart is seeking to streamline its operations and focus on its core businesses in the United States and elsewhere. It also comes as the company is facing increased competition from Amazon, which has been rapidly expanding its own grocery business.
As part of the deal, Walmart will retain a minority stake in Asda and will continue to license the Asda brand to the company. The deal is expected to close in the first half of next year.
The sale of Asda is part of a broader effort by Walmart to divest itself of non-core assets and focus on its core businesses. In 2016, Walmart sold a majority stake in its Brazilian operations to private equity firm Advent International for $2.5 billion. Last year, it sold a majority stake in its Chinese e-commerce business to JD.com for $1.
Walmart has been seeking to offload Asda for several years. In 2013, it unsuccessfully tried to merge Asda with another British supermarket chain, Sainsbury’s. In 2015, it held talks with European grocery giant Tesco about a possible merger of the two companies’ UK operations, but those talks ultimately broke down.
The sale of Asda is a sign that Walmart is willing to exit businesses that are not core to its operations in order to focus on its core competencies. This move will allow Walmart to invest more resources into its other businesses and compete more effectively against Amazon and other rivals.
