Retail mega-chain Walmart is as ubiquitous in the U.S. as sliced bread. But their presence abroad would be unrecognizable for many Americans.
Abroad, Walmart doesn’t even operate under its own name. Their presence in the UK is one example. In fact, you might have heard Walmart linked with the UK’s Asda. So, does Walmart own Asda? Here is what you need to know.
Does Walmart Own Asda?
Walmart does not currently own Asda, as the company completed the sale of its stakeholder share in February 2021. However, from 1999 until that point in 2021, Walmart held the stakeholder share in Asda and directed operations for the well-known British chain.
To learn more about the background of Asda, Walmart’s acquisition and sale of the chain, and whether or not Walmart still has any claim on Asda, see all the information below!
When Did Walmart Own Asda?
Walmart acquired the majority stakeholder share of Asda in July 1999.
Walmart outbid Kingfisher plc, a UK retailer, with whom Asda had even reached an agreement and a price tag for the deal.
However, when Walmart made the greater bid, Asda abandoned its talks with Kingfisher to pursue the new deal.
By the end of the negotiations, Walmart ended up purchasing Asda for £6.7 billion, or $10.8 billion.
In the years after, there were many upper-level personnel change-ups, sales of different Asda branches, expansions into new territory, and even a resale of Asda.
However, Walmart sold Asda to another company it owned in 2009, thus retaining control over the chain.
The latter years of the 2010s saw Asda expanding and adopting more Walmart-esque characteristics, like the slogan we all recognize: “Save Money. Live Better.”
Leadership also changed twice in two years, with two different CEOs appointed in 2016 and 2017.
And then in October 2020, Walmart announced it was selling its majority stake in Asda. The deal was finalized in February 2021.
Who Bought Asda From Walmart?
Zuber and Mohsin Issa, co-founders of the EG Group, purchased the majority stake in Asda from Walmart in 2021 for $8.8 billion (or £6.8 billion).
The Issa brothers had previously acquired the U.S.-based chain Cumberland Farms (convenience stores), a move that gave them a foothold in 31 states.
Their ownership of Asda brings the chain back into the hands of British citizens for the first time in over 20 years.
Why Did Walmart Sell Asda?
Walmart hasn’t made any official statements about its sale of Asda, but I can think of a few theories.
First, Walmart has had a notoriously difficult time breaking into European markets.
The American “discount goods” model doesn’t translate quite so well across the Atlantic, where things may be perceived as cheap, and therefore undesirable.
Second, UK business regulations made it difficult for Walmart to open more Asda stores the way they open supercenters in the U.S.
Third, the highly populous Asian markets – namely India, with its enormous economy – are calling on Walmart.
As Forbes.com puts it, “Walmart needs a growth market, and India is the best shot.”
It wouldn’t be unthinkable that Walmart opted to pull out of Asda to focus more on the still-growing economy of nations like India.
How Much Does Walmart Own Of Asda?
While Walmart sold its stakeholder/decision-making share, they still retain an equity stake, a seat on the Asda board, and a “ongoing commercial relationship,” according to Forbes.
What Is Asda?
Asda was founded in 1965 when a family of butchers, who had been in operations since the 1920s, merged companies with a family of dairy farmers.
These were the Asquiths, who had run a chain of butcher shops in the UK since the 1920s, and the Stockdales of Associated Dairies and Farm Stores Ltd.
Two Asquith brothers and Noel Stockdale formed an alliance and merged more than companies; the “As” from Asquith and the “Da” from dairy became “Asda.”
Just four years later, Noel Stockdale bought out the Asquith brothers’ shares and became chairman of Asda.
Though the company and its stores became well-known fixtures throughout the UK, Asda flirted with bankruptcy in the 1990s.
The company had expanded but done so by acquiring a great deal of debt. They were able to wipe out all that debt, but seemed open to considering a merger.
In the late 90s, Asda’s CEO visited the States to study Walmart and bring the “hypermarket” model back to Asda.
This shift in store model made the eventual acquisition by Walmart all the more obvious, with Asda even abandoning a merger with another company when Walmart made an offer.
That acquisition was finalized in July 1999 and began the Walmart era of Asda’s operations.
Asda’s CEO, Allan Leighton, was a self-professed admirer of the Walmart model and called the retail giant’s bid “a terrific compliment.”
Walmart’s acquisition was seen at the time as part of their plan to get a greater foot in the door in the European market, while Asda benefitted from Walmart’s gargantuan resources.
Walmart owned the majority stake in Asda from 1999 until 2021, when it sold the UK supermarket chain to the Issa Brothers for $10.8 billion.
While Walmart does not have the decision-making power in the company that they once held, they continue to hold a small stake and a seat at the table.