Walmart (NYSE:WMT) has agreed to sell its U.K.-based Asda supermarket chain to billionaire investors Mohsin and Zuber Issa and investment management company TDR Capital.
However, the retailer will also record a $2.5 billion loss on the transaction, and its earnings will be diluted by $0.25 per share in the first full year following completion of the deal as a result.
A long time coming
Walmart has been trying to unload the supermarket chain for some time. It tried selling Asda to rival U.K. grocer Sainsbury, but regulators blocked it for competitive reasons. Then, it briefly planned to spin it off, but shelved the idea.
Earlier this year Walmart again sought to sell the chain, but withdrew those plans, too, when the COVID-19 pandemic struck. Now it will be selling it for 6.8 billion pounds, barely more than the 6.7 billion pounds it purchased it for in 1999.
Walmart, though, will retain an equity investment in the business, as well as its existing commercial relationship with the chain, and it will have a seat on the board of directors.
CNBC quotes the new owners as saying they look "forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the U.K." They plan to use their experience building up the EG Group gas station chain to inform their plans for Asda.
The buyers have committed to investing 1 billion pounds in the retailer over the next three years.