Asda could be floated after Sainsbury's deal blocked

Darnell Taylor
May 18, 2019

Walmart International boss Judith McKenna said the United States chain is considering an initial public offering (IPO) for its United Kingdom subsidiary, but said it was "not rushing into anything".

Walmart, the world's biggest retailer, said it is considering a stock market listing for its British supermarket arm Asda, whose attempt to combine with rival Sainsbury's was blocked by the United Kingdom regulator last month.

The GMB union said it had called for an urgent meeting with Walmart bosses to discuss the flotation plans.

Supermarket chain Asda could be floated, staff were told on Wednesday, after the competition authorities derailed its proposed tie-up with rival J Sainsbury.

Ms McKenna told the 1,200 managers at the meeting: "Walmart does not have a one-size-fits-all approach to operating its global markets, but a consistent focus on strong local businesses powered by Walmart".

John Colley, an associate dean of Warwick Business School, said: "Asda is clearly not wanted by Walmart, which is occupied with greater challenges such as the threat of Amazon".

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But she added that such a move could "take years".

"If the big four [British supermarkets] want to keep their market shares they will have to sharpen their prices in the face of rapidly expanding cost players Aldi and Lidl".

"It would be good for the market if Asda does IPO", he said, "as it would have to disclose more information than it does now as part of Walmart".

Asda chief executive officer Roger Burnley told the managers at the Leeds meeting on plans to invest £80 million in the price throughout the rest of 2019, ensuring investment is in areas that are most important to customers.

Burnley told staff: "We have a mountain to climb - continuing momentum into growth and ultimately, sustainability - but we can make a difference".

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