In a deal that reduces its role in the Japanese retail market, Walmart has signed a definitive agreement with investment firm KKR & Co. and Internet services provider Rakuten under which KKR will purchase a majority stake and a new Rakuten subsidiary will purchase a minority stake in Seiyu GK at $1.6 billion.
Walmart began buying into Seiyu, which operates a nationwide supermarket chain in Japan with more than 300 retail units, in 2002 and assumed full ownership in 2008.
Under the agreements, KKR will acquire a 65% stake in Seiyu and Rakuten will acquire a 20% stake through a newly created subsidiary, Rakuten DX Solution, focused on retailer digital transformation, while Walmart will retain a 15% stake. The new ownership structure will enable Seiyu to take advantage of KKR, Rakuten and Walmart’s combined retail expertise and innovation. It also will accelerate Seiyu’s digital transformation to further benefit both Seiyu’s customers and business partners.
Last year, Seiyu launched a strategy to accelerate growth through a more concerted focus on providing value, fresh produce and digital convenience to customers, across key areas, including market share, customer satisfaction, associate engagement and financial performance, according to the acquiring companies. Together, they plan to bring complementary strengths to build on Seiyu’s momentum and support its efforts to become Japan’s leading omnichannel retailer.
The new ownership structure builds on established collaborations between Rakuten and Walmart, including the Rakuten Seiyu Netsuper online grocery delivery service and ebook service support in the U.S. Seiyu will retain the ability to access Walmart’s global retail best practices, sourcing network and scale to maintain the price leadership and value it provides to customers.
Judith McKenna, president and CEO of Walmart International, said, “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. 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.”