NEW YORK/SAO PAULO (Reuters) - Walmart Inc (WMT.N) said on Monday that it has sold an 80 percent stake in its Brazilian operations to private equity firm Advent International, exiting an underperforming business in its third major international deal since April.
The world’s biggest retailer has been looking to jumpstart its overseas business by retreating from lower-growth markets and investing in places like China and India. Brazil had for a decade been the focus of expansion but the unit stumbled in recent years as operational issues compounded the effects of a deep recession.
Walmart did not disclose the value of the transaction but said it would record a noncash charge of roughly $4.5 billion related to the deal in the second quarter. The retailer will retain the remaining 20 percent stake in Walmart Brazil.
Two people involved in the deal said that charge is close to the value of the Brazilian unit on Walmart’s books, meaning the deal value was close to zero. The sources declined to specify the exact value of the deal.
Walmart is trying to catch up with competitors ranging from grocer Aldi Inc to Amazon.com Inc (AMZN.O) in key international markets. The U.S.-based retailer’s underperforming international business made up less than one-quarter of total revenue of $500.3 billion in fiscal 2018.
In an effort to fix its international performance, Walmart in January appointed Chief Operating Officer Judith McKenna to run the international unit and a slew of changes have been made under her leadership.
Walmart recently sold a majority stake in its UK arm ASDA to J Sainsbury Plc (SBRY.L
