Walmart Retains 15 Percent Seiyu Stake in Sale to KKR and Rakuten
- by Melissa De Leon Chavez
JAPAN - It’s been days rather than weeks since Walmart sold its 25-year-long foothold in the Argentina retail market, and the retailer is making similar moves in Japan. The company has sold all but 15 percent of its stake in chain Seiyu. KKR is to purchase a majority stake with the new Rakuten subsidiary to acquire a minority stake, both teaming up with Walmart to help accelerate the banner’s digital transformation.
“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,” said Judith McKenna, President and CEO of Walmart International. “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. We look forward to supporting Seiyu’s growth and success, alongside KKR and Rakuten, as a minority investor.”
Walmart pointed to both KKR and Rakuten’s retail expertise, including track records of driving growth in e-commerce and digital marketing platforms across the globe, according to a press release.
Complementing Walmart’s goal to build strong, local businesses by bringing together both the right leaders and structure, the new ownership holders hope to help Seiyu become the local, innovative, value retailer of choice.
“KKR is pleased to invest in the success of Seiyu given the important role it plays in the lives of customers across the country,” Hiro Hirano, Co-Head of Asia Pacific Private Equity and CEO of Japan at KKR, said. “We are also excited by the prospect of working with Seiyu’s associates, who have dedicated themselves to supporting the business in spite of this year’s unprecedented challenges. 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.”
Though financial terms were not disclosed in the release, the transaction is expected to close in the first quarter of 2021, subject to regulatory approvals.
Likewise, Kazunori Takeda, Group Executive Vice President and President of Commerce Company, Rakuten, Inc., pointed to the company’s building on its successful partnership on Rakuten Seiyu Netsuper and deep experience in online retail and data-based marketing.
“We look forward to accelerating digital transformation of Seiyu brick and mortar retail and further merging the best of offline and online retail to offer Seiyu customers the best possible OMO1 customer experience. The planned establishment of Rakuten DX Solution will also allow us to offer digital solutions optimized to transform retail at Seiyu and in new future partnerships with retailers across Japan,” Takeda concluded.
As this transition strengthens, will we see Walmart completely exit Japan’s market as it focuses its prowess elsewhere? ANUK will report.