BRAZIL - Walmart announced that Advent International, global private equity investor, has agreed to invest in a majority stake in Walmart Brazil. Under the terms of the agreement, Advent will hold 80 percent of Walmart Brazil, and Walmart will retain the remaining 20 percent upon the completion of the transaction.
“Walmart is committed to building strong, resilient businesses that continuously adapt to local customers’ needs in a rapidly changing world,” said Enrique Ostale, EVP and CEO of Walmart UK, Latin America, and Africa, in a recent press release. “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.”
According to a report from Forbes, Walmart has made several bets in markets in which it feels it will succeed. But after almost 20 years of operating in Brazil, the company had not come any closer to solving the Brazilian market. Eduardo Yamashita, Managing Director of GS & Intelligence, suggested to Forbes, that this was perhaps due to international and local competition or Walmart’s struggles to properly localize their business to meet the needs of a diverse Brazilian population.
Walmart noted that the move stemmed from its aspiration to strengthen the business and position it for long term success. The decision to partner with Advent in Brazil resulted from a deliberate review of Walmart’s international portfolio.
“We have been in Brazil for over 20 years and are excited about this partnership with one of the country's leading retailers,” said Patrice Etlin, a Managing Partner at Advent International in Brazil. “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.”
Walmart expects to record a non-cash, net loss of approximately $4.5 billion as a discrete item in the second quarter, a significant portion that it attributes to the recognition of cumulative currency fluctuation losses.
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