Walmart 'seriously considering' Asda IPO

Andrew Cummings
May 18, 2019

Walmart Inc is mulling an initial public offering for its Asda unit, a listing that that could value the United Kingdom grocer at as much as an estimated 8.5 billion pounds (US$11 billion).

"While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO", Judith McKenna, the company's worldwide chief, told employees at an internal event in Leeds, England, on Tuesday, according to a summary of the event provided by Asda.

Retail giant Walmart (NYSE: WMT) confirmed it's considering an IPO for British supermarket Asda after its recent merger with Sainsbury's was rejected by United Kingdom regulators, according to CNBC.

John Colley, an associate dean of Warwick Business School, said: "Asda is clearly not wanted by Walmart, which is occupied with greater challenges such as the threat of Amazon".

McKenna's comments are the first time Walmart has publicly addressed its future strategy for Asda since the Sainsbury's deal collapsed.

Ms McKenna told the 1,200 managers at the meeting: "Walmart does not have a one-size-fits-all approach to operating its worldwide markets, but a consistent focus on strong local businesses powered by Walmart".

Asda has set out plans to trial same-day grocery deliveries, chief executive Roger Burnley told 1,200 store and depot managers in the wake of the prohibition of the proposed takeover by Sainsbury's.

GMB national officer Gary Carter said there was "uproar among the workforce" over plans to change Asda employees' contracts. In addition, there will be additional Click and Collect collection towers installed in Asda stores.

Asda, which calls its staff "colleagues", intends to make £80m of price cuts during the rest of this year and trial new technology.

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