Walmart to Sell Argentina Operations to Grupo De NarvaezNovember 7, 2020
Walmart Inc. said it agreed to sell its business in Argentina to Grupo de Narvaez, without disclosing a price.
Walmart shares gained 1% at 9:49 a.m. in New York trading. The company says it will record a non-cash loss of about $1 billion after tax mainly because of currency losses.
The world’s largest retailer departs Argentina after 25 years in South America’s second-largest nation. It currently employs over 9,000 workers in the country and as of 2019 it was the nation’s ninth-largest private employer. It also operates two other big-box chains in Argentina, Punto Mayorista and Changomas. The new owner was founded by businessman Francisco de Narvaez, who owns supermarket chains in Latin America.
“We are excited by the local retail expertise the new owners bring to this already strong business, and we believe this deal creates the right structure to help it truly flourish for many years,” Judith McKenna, president of Walmart’s international business, said in astatement.
Walmart Chief Executive Officer Doug McMillon has been working to reshape the retailer’s portfolio of international assets. Among the recent changes, Walmart sold a majority stake in its Brazil operations to Advent International in 2018 and last month found a buyer for its U.K. grocer Asda.
Grupo de Narvaez already has retail operations in Argentina, Ecuador and Uruguay. Walmart will not retain an equity stake, it said.
Walmart’s departure comes after Argentina President Alberto Fernandez’s government has increased currency controls and temporarily frozen prices on consumer items from food and beverages to cell phone plans and internet service. He’s also made it illegal for companies to fire workers on payroll and doubled workers’ severance pay if firms leave, close or negotiate a resignation.
The policies complicate doing business in a country that’s on pace for its worst one-year economic decline on record with 37% inflation and double-digit unemployment.
Other multinational firms, such as LatAm Airlines, retailer Falabella and auto paint firm Axalta, stopped operations in the country this year. Honda Motor Co. stopped making cars in Argentina last May, while Starbucks and American Airlines have reduced their footprint in the country too.
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