The world's largest retailer has found that he can not take over the whole world alone.
Walmart Inc. is in talks to give up control of hundreds of stores in the UK and Brazil, two major markets, battling for years, according to those familiar with the talks. At the same time, it is preparing to invest billions of dollars in an Indian e-commerce startup to crack a promising market that escaped the US giant for a long time.
Having spent decades building up businesses around the world and incorporating local players, Walmart establishes joint ventures in competitive markets and focuses on investing in areas that executives consider a company with annual sales of $ 500 billion in growth bring. The change in strategy stems from Walmart's cracking down on Amazon.com Inc. and a growing harvest of discount grocery stores in the US and overseas.
Walmart is about to sell a controlling stake in its British grocery chain Asda to J Sainsbury PLC, according to persons familiar with the situation. The agreement is expected to be announced on Monday, and Walmart would retain around 40% of the merged entity, said one of these individuals.
Walmart is also in talks to sell a controlling stake in his Brazilian business to the private equity firm Advent International, according to the people who are familiar with these negotiations. Although a deal is not yet final, Advent could take over 80% of the Brazilian business next month, said one of these people.
At the same time, Walmart has in advanced discussions acquired a controlling interest in Flipkart Group, a self-founded start-up that has become India's largest e-commerce company. The deal is still ongoing and might fall apart, a person familiar with the Flipkart discussions said. Flipkart said it was valued at $ 1
The three deals, if reached, would be the Bentonville, Ark. Dramatically Transforming Company to Over 6,300 of its 12,000 Businesses Outside the US For years, the company's international sales growth has lagged behind the US market, which still accounts for two thirds of Walmart's total revenue and most of its profits. On February 1, the company changed the executive responsible for its international operations.
"There is more work for the portfolio," said Chief Executive Doug McMillon during a conference call to discuss returns in February. "We have prioritized and focused on our North American core and key markets, such as China and India."
Walmart stocks have fallen about 20% since reaching an all-time high of $ 109.98 at the end of January. After welcoming the company's initial achievements in expanding online sales in the US, investors are worried about the cost of fighting Amazon, signaling that Internet growth has eased in the last quarter.
A Walmart merger with Sainsbury would create a UK grocery giant with total sales of around £ 50 billion ($ 68.9 billion), according to the latest available financial results. On Saturday, Sainsbury, which has a market value of $ 8.16 billion, confirmed the talks.
Walmart operates approximately 600 Asda stores in the United Kingdom, the largest foreign-owned market in the company. The company acquired Asda in 1999 for approximately $ 10.8 billion – the largest acquisition ever – as part of Walmart's goal to double its international operations.
Walmart entered the Brazilian market in 1995 and is currently the third largest supermarket group in the country, with a combined turnover of 28.2 billion Brazilian reais ($ 8.13 billion), according to the Brazilian Association of Supermarkets collected. Although it has 465 stores in Brazil, Walmart has difficulty increasing sales in the country, and two years ago he said he would close 60 loss-making deals.
After Mr. McMillon became Walmart's CEO in 2014, Walmart stopped building hundreds of US stores each year, spending instead to grow online, buy e-commerce startups, and improve existing businesses , At the end of 2016, Walmart paid $ 3.3 billion to buy the startup Jet.com
Internationally, Mr. McMillon is more willing to work with local power plants to grow faster and take over Amazon outside the US
In China Where Walmart With approximately 440 stores, in 2016 the company sold its e-commerce company Yihaodian to JD.com Inc. in exchange for a stake in the Chinese e-commerce firm. It is now working with the Chinese company to supply local food, warehousing and other activities.
Walmart has about 330 stores in Japan. Earlier this year, the company formed a joint venture with Japan's largest online retailer, Rakuten Inc., to provide online grocery deliveries and digital books in the US.
Walmart executives say India is a key battleground. "India is a market, over time, I think, whether it is 10 years, 20 years or 30 years, we will be glad that we are in India, and I think there are many opportunities for growth there," he said Chief Brett Biggs said last summer.
In India, Walmart has been growing slowly for years with physical stores blocked by strict regulations from selling products directly to consumers. Walmart opened its first wholesale stores in India in 2009, hoping that it would eventually be possible to open consumer markets. But it put these plans on hold in 2013.
Instead, it has opened 21 Best Price wholesale stores, with plans to open 50 more. The affiliate-only stores are similar to US warehouses such as Costco and Sam's Club, but are available only to licensed business owners to comply with government regulations.
By 2016, Walmart had talks with Flipkart about investing in the startup in order to gain a better foothold in Asia's third largest economy. Only a small proportion of the 1.3 billion people in India regularly buy online, but the number is increasing as more people access the Internet for the first time. Online trade in India totaled around $ 20 billion last year, and should increase to $ 35 billion by 2019, according to Forrester
Flipkart, founded in 2007 by two former Amazon employees, has already reached billions of dollars Investors such as the SoftBank Group, Tencent Holdings and Microsoft Corp. It sells everything from sofas to shoes and smartphones.
Walmart's interest in Flipkart is defensive in part. Amazon founder Jeff Bezos has pledged to invest $ 5 billion in India, and Amazon has made quick profits against Flipkart since launching in India in 2013.
Ben Dummett in London contributed to this article
Write to Sarah Nassauer at sarah.nassauer @ wsj.com, Luciana Magalhães at Luciana.Magalhaes@wsj.com, and Newley Purnell at newley.purnell @ wsj.com