Asda sale thrown in doubt amid coronavirus crisis

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Asda sale thrown in doubt amid coronavirus crisis
Asda is being eyed up for a potential £7bn sale.
// Coronavirus pandemic has reportedly affected Walmart’s plans to sell a majority stake in Asda
// Potential buyers reportedly finding it difficult to find the money to fund the £7bn price tag
// Walmart has been attempting to sell Asda for nearly two years – including a failed £12bn merger with Sainsbury’s

The coronavirus pandemic has reportedly affected Walmart’s plans to sell a majority stake of its British subsidiary Asda.

London Stock Exchange sources speaking to German FMCG newspaper Lebensmittel Zeitung have said that potential buyers are reportedly finding it difficult to find the money to fund the £7 billion price tag for a majority stake in the Big 4 retailer due to a lack of liquidity in international capital markets.

Apollo Global Management, TDR Capital and Lone Star Funds were thought to be in interested line-up to acquire Asda from US parent company Walmart, following a second round of bidding, Bloomberg reported last week.


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Walmart had previously said it would proceed with the planned sale of Asda after attracting initial bids from the three buyout firms, even as tightening credit threatened to hamper debt-fuelled deal making.

Earlier this month, Asda was thought to be surrounded by petrol station tycoons and private equity houses after Walmart confirmed it was in talks to sell its stake.

Potential bidders included entrepreneurs Zuber and Mohsin Issa, the billionaire founders of EG Group.

TDR is now teaming up with EG Group, its portfolio company.

No final decisions have been made, and Walmart could decide to keep Asda for longer if bids do not meet its expectations.

Walmart has been attempting to sell Asda for nearly two years – including its failed £12 billion merger with Sainsbury’s – to free up cash and clear the global balance sheet of the listed US retail giant of any possible investment burdens caused by Asda.

It is understood Walmart would retain a significant minority stake in the UK grocer in any sale.

After the attempted deal with Sainsbury’s was blocked by the CMA last April, Walmart said it would look at a possible stock market listing for Asda.

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