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Walmart Considering Talking Is UK Arm Asda Public


05/15/2019


Walmart Considering Talking Is UK Arm Asda Public
After the anti competition regulators in the United Kingdom turned down an attempt for the combination of British supermarket arm Walmart, the world's biggest retailer – Asda, with rival Sainsbury's, last month, the US retailer now plans to take the British subsidiary public into the stock market, Walmart said.
 
"While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO - a public listing - to strengthen your long-term success," Judith McKenna, the Walmart International CEO, told Asda managers at an event in Leeds, northern England, on Tuesday. But according to comments released by Asda afterwards she also issued a caution that any preparations for an IPO would "take years".
 
Sainsbury's 7.3 billion pound ($9.4 billion) acquisition of Asda was stalled by the Britain's competition regulator which effectively blocked one of the potential ways for Walmart to exit from the UK market.
 
That decision raised a couple of speculations among investors which included the possibility of Asda being attempted to be sold off by Walmart to appropriate private equity any and the speculation of Walmart considering taking the company to the stock market. Walmart had acquired Asda in 1999 in a deal worth about 6.7 billion.
 
The comments made by McKenna is the first time that Walmart has talked anything in public about its future plans of the company for Asda following the collapse of the Sainsbury's deal. "Walmart does not have a one-size-fits-all approach to operating its international markets, but a consistent focus on strong local businesses powered by Walmart," she said.
 
Like-for-like sales growth has been reported for seven straight quarters by Asda. According to analysis, this performance was driven by kits strategy of cost leadership and focus on lower prices, greater innovation in own-brand products, better store standards and enhancement in its e-commerce business.
 
It is also being expected that Asda would also be reporting growth in revenues and profits for the eight straight quarter, according to monthly industry data produced by researcher Kantar.
 
Throughout the rest of 2019, there would be 80 million pounds of price cuts, said CEO Roger Burnley to the company’s managers at the Leeds meeting. He said hat the strategy adopted by Asda was working well but also added that delivering of the strategy at the same rate would be difficult without achieving the synergies that would have been delivered by the Sainsbury's deal.
 
(Source:www.money.usnews.com)