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Walmart to sell majority stake in Brazilian unit to Advent

RBR Staff Writer Published 05 June 2018

Walmart has agreed to sell 80% of its stake in Brazilian unit to private equity investor Advent International.

Upon completion of the transaction, the US retail giant Walmart will retain 20% stake in Walmart Brazil .

The transaction, which is subject to regulatory approval in Brazil, is expected to be closed later this year.

Walmart stated that it has decided to divest in Brazil after a review of its international portfolio.

The company did not reveal the enterprise value of the transaction, but stated that it will record a non-cash, net loss of about $4.5bn as a discrete item in the second quarter.

It also stated that a significant portion of the net loss is because of the recognition of cumulative foreign currency translation losses.

Advent International managing partner in Brazil Patrice Etlin said: "We have been in Brazil for over 20 years and are excited about this partnership with one of the country's leading retailers.

"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."

Advent has been present actively in the retail industry not only in Brazil, but also internationally. After opening its office in São Paulo office in 1997, the fund has invested in 30 Brazilian companies across various sectors.

It has been active in the retail, consumer and leisure segments worldwide for 28 years and has made 75 investments in 22 countries.

Walmart UK, Latin America and Africa executive vice president and CEO Enrique Ostale 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."


Image: Walmart’s neighbhorhood store. Photo: Courtesy of Walmart Inc.