Walmart is seeking up to US$3.74 billion in sale of JD.com stake

WALMART is seeking to raise as much as US$3.74 billion by selling its stake in Chinese e-commerce firm JD.com, ending an eight-year partnership in a key retail arena now plagued by an economic downturn and intense competition.

The US retailer is offering 144.5 million shares in a US$24.85 to US$25.85 price range, sources familiar with the matter said. Morgan Stanley is the broker-dealer handling the offering, they added, asking not to be identified because the information is private. That’s a discount of as much as 11.8 per cent to Tuesday’s close, according to Bloomberg calculations.

JD.com’s Hong Kong-listed shares fell 11 per cent. The envisioned deal comes as Walmart refines its strategy in the world’s second-largest economy, where retail is dominated by online platforms such as Alibaba Group Holding and Temu-owner PDD Holdings. The deal comes as a property crisis, market volatility and uncertain job prospects take a toll on Chinese consumption.

Representatives for Walmart, JD.com and Morgan Stanley did not immediately respond to requests for comment.

Walmart’s Sam’s Club has been a rare bright light for the company. In China, the unit offers premium goods with a membership model and has been a success in the supermarket business. However, the company’s other outlets are struggling as rivals chase cash-strapped shoppers.

Last week, Alibaba – long a barometer for the industry – surprised investors when it revealed its main commerce business actually shrank in the June quarter.

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The consumer environment in general is worsening and growth is evaporating given the economic uncertainty. JD.com’s June-quarter results beat expectations – even though revenue grew a mere 1.2 per cent. That extended a string of single-digit quarters dating back to 2022, a period of malaise that’s halved its market value since the start of last year.

The share sale would mark the end of a partnership between the two companies that started when Walmart acquired a 5 per cent stake in the Chinese company in 2016.

That deal also involved JD.com taking over Walmart’s Yihaodian online marketplace, which focused on selling groceries to higher-end female shoppers in major Chinese cities, the companies said then. Later that year, Walmart increased its holdings in JD.com to 10.8 per cent. BLOOMBERG