American retail giant Walmart Stores Inc., which currently operates 471 stores in Brazil, has reportedly sold its 80 per cent stake to Advent International, one of the largest global private equity investors.
The amount of transaction has not been divulged by either of the parties involved. Walmart will however continue to operate with 20 per cent stake. Walmart started its operations in Brazil in 1975, notably.
It is being reported that Walmart would record a noncash charge of roughly US $ 4.5 billion related to the deal in the second quarter.
The move has come after Walmart failed to deliver a captivating performance in Brazil in the past two years. It reported revenues of almost 30 billion Reals (US $ 9.4 billion approx.) in 2016 from its operations in Brazil.
In recent times, Walmart has taken various initiatives which reshaped its international operations including the sale of Asda and acquisition of Indian e-commerce player Flipkart.
Factors like poor retail locations, inefficient operations, labour issues and uncompetitive pricing of products together resulted into losses for the world’s biggest retailer in the Brazilian market, the largest in South and Latin America.
Recession in Brazil also added to the woes of the already struggling retailer.
In addition to Brazil, Walmart has either shuttered or squeezed its operations at global locations. It left Germany and South Korea in 2006 and closed its office in Moscow in 2010 as it did not an attractive deal to enter Russia.
