Wal-Mart to Sell Units in Brazil

Wal-Mart Stores Inc. is in discussions with buyout firm Advent International Corp. and other funds to sell major stake in its Brazilian operations, according to the statement of the two people with direct knowledge about the matter on Sunday.

Wal-Mart on talks to sell its unit in Brazil.

One of the sources said that Goldman Sachs & Co. is advising the retail giant. However, other private equity firms that are looking into the investment in the Brazilian unit are Acon Investments LLC and GP Investments Ltd.

Meanwhile, officials of Wal-Mart in Brazil did not give any comment. As well as Advent and GP.

Goldman and Acon did not instantly reply to requests for comment.

The overseas business of Wal-Mart is not the growth driver it once was as it has continued to grapple with an economic slowdown in Brazil and competition from discount retailers in the UK.

In 2016, Doug McMillon, Chief Executive Officer of Wal-Mart, highlighted to investors that he was planning to review its global operations. His comments had generated speculation that the retail giant would look to restructure or even pull out of markets where it has struggled.

Within the same year, Wal-Mart closed at least 10 percent of its stores in Brazil and shed non-core businesses across Latin America. It also sold its e-commerce business in China to the Chinese e-commerce business, JD.com.

According to the local website of the company, Wal-Mart currently operates 471 stores in Brazil. The retailer’s unit in Brazil has reported revenues of almost 30 billion reais or $9.4 billion in 2016.

The retail giant has posted its operating losses in Brazil for seven years in a row after an aggressive, decade-long expansion left it with poor locations, inefficient operations, labor troubles, and uncompetitive prices.

The operations of Wal-Mart in Brazil did not improve over the last two years, according to the people with knowledge about the deal.

Wal-Mart started sounding as if it was out of possible investors in the unit several months ago, which led the business to seek out buyout firms, according to the source.

A report on Sunday stated that the private equity Advent was in talks to acquire 50 percent of the Wal-Mart unit. However, the report did not say how it got the information on the state of the talks.

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