Asda considering stock market flotation

Cornelia Mascio
Mag 18, 2019

Asda was acquired by USA retail giant Walmart in 1999.

Asda's USA owner has said it is "seriously considering" a stock market flotation for the United Kingdom supermarket after the chain's deal to merge with rival Sainsbury's was blocked.

She added that preparations for an IPO would "take years".

Judith McKenna, Walmart's worldwide chief executive, said Walmart was "seriously considering a path to an IPO - a public listing". Visit MarketWatch.com for more information on this news. Bloomberg News reported at the time that Walmart was exploring options for the unit, with an IPO one of the alternatives on the table.

The decision sparked speculation that parent company Walmart would look to sell, with analysts pointing to potential private equity bids.

Walmart has revamped its worldwide portfolio by selling a majority stake in its Brazilian business and acquiring a majority interest in Indian e-commerce leader Flipkart Group in its biggest-ever deal. An Asda IPO could give the unit a similar structure to Walmart's separately listed Mexico and Central America business.

Asda has set out plans to trial same-day grocery deliveries, chief executive Roger Burnley told 1,200 store and depot managers in the wake of the prohibition of the proposed takeover by Sainsbury's.

McKenna said the U.S. retailer did not have a "one size fits all" approach to its divisions around the world and that Asda should focus on improving its operations, including the implementation of £80m of price cuts to take on rivals such as Aldi and Lidl.

Burnley also confirmed Asda would "accelerate our price position", briefing staff on plans to invest £80 million ($103.3 million) in the price throughout the rest of 2019.

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