Wal-Mart and Bharti Enterprises end JV
Both companies will own and operate separate businesses in IndiaOctober 10, 2013 | comments ( 0 ) |
Bharti Enterprises and Wal-Mart Stores, Inc. has announced that they have reached an agreement to independently own and operate separate business formats in India and discontinue their franchise agreement in the retail business. The agreement is subject to finalization of definitive agreements and receipt of the requisite regulatory approvals.
Upon receipt of required clearances, Walmart would acquire Bharti’s stake in Bharti Walmart Private Limited, a joint venture between Bharti and Walmart, giving Walmart 100 percent ownership of the Best Price Modern Wholesale cash and carry business. Walmart plans to continue to grow this business while working with the government and interested stakeholders to create conditions that enable foreign direct investment in multi-brand retail.
As part of the proposed transactions, Bharti will acquire the Compulsory Convertible Debentures (CCDs) held by Walmart in Cedar Support Services, a company owned and controlled by Bharti. Bharti Retail will continue to operate ‘easyday’ retail stores across all formats and invest in and grow the business.
Rajan Bharti Mittal, Vice Chairman and MD, Bharti Enterprises said: “Bharti is committed to building a world-class retail venture and will continue to invest in Bharti Retail across all formats. We believe that with our current footprint of 212 stores, we have a strong platform to significantly grow the business and delight customers. We wish Walmart the very best for the future.”
Speaking on the occasion, Scott Price, President and CEO Walmart Asia said: “Given the circumstances, our decision to operate independently will be beneficial to both parties. Through Walmart’s investment in India, including our cash and carry business, supply chain infrastructure, direct farm program and supplier development, we want to serve India and its people, and continue to make important social and environmental contributions to the country. Walmart is committed to businesses that serve our members and provide good returns for our shareholders, and we will continue to advocate for investment conditions that allow FDI multi-brand retail in India. We wish Bharti well as they grow their retail business.”
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