American grocery giant Walmart ‘seriously considering’ listing Asda on the stock market following Sainsbury’s merger block
- Walmart international boss said US giant is mulling an IPO of UK firm Asda
- It has owned Asda – the UK’s 3rd biggest supermarket – for twenty years
- It comes after the firm’s planned merger with Sainsbury’s was blocked
US giant Walmart – the world’s biggest retailer – is ‘seriously considering’ listing Asda on the stock market, it has emerged.
The change in strategy comes after the UK competition watchdog blocked a proposed merger of Asda and Sainsbury’s last month.
Going public? Asda’s US owner, Walmart, is considering listing the UK supermarket after the Sainsbury’s merger was blocked
The deal between the UK’s second and third biggest supermarkets would have created a £50billion rival to Tesco, but the watchdog feared it would lead to higher prices for shoppers.
Walmart, which bought the cut price UK grocery chain twenty years ago for £6.7billion, told Asda managers on Tuesday that it is mulling a stock market float but said any preparations would ‘take years’.
Judith McKenna, Walmart’s international boss, said: ‘While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO – a public listing – to strengthen your long-term success.’
‘Walmart does not have a one-size-fits-all approach to operating its international markets, but a consistent focus on strong local businesses powered by Walmart,’ she added.
The £12billion merger between Asda and Sainsbury’s was blocked by the UK competition watchdog last month
The Competition and Markets Authority’s decision to veto the audacious Sainsbury’s-Asda merger triggered speculation that Walmart may seek a new suitor for the Big Four chain.
After years of decay, Asda has enjoyed a return to form with seven consecutive quarters of sales growth.
It has invested in price cuts, own-brand products and improving the online business as it comes under pressure from industry incumbents Aldi and Lidl.
Asda is currently the only privately owned ‘Big Four’ supermarket. Tesco, Sainsbury’s and Morrisons are all publicly-traded companies.
Sainsbury’s shares sunk to a 30-year low of £2.09 last week. Disappointed investors sold out when the deal with Asda was halted fearing that Sainsbury’s would be unable to keep pace without it.
Moving on: Sainsbury’s boss Mike Coupe (above) confined the failed Asda deal to ‘ancient history’ after revealing it had cost nearly £50million