(Bloomberg) — Walmart Inc. is seeking to raise as much as $3.74 billion by selling its stake in Chinese e-commerce company JD.com, ending an eight-year partnership in a retail powerhouse now struggling with an economic slowdown and intense competition.
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The U.S. retailer is offering 144.5 million shares in a price range of $24.85 to $25.85, said people familiar with the matter. Morgan Stanley is the broker handling the offering, they said, asking not to be identified because the information is private. That represents a discount of up to 11.8% to Tuesday’s close, according to Bloomberg calculations.
Hong Kong-listed shares of JD.com plunged 11%, leading a broader selloff in Chinese e-commerce and technology stocks. The expected deal comes as Walmart refines its strategy in the world’s second-largest economy, where online platforms such as Alibaba Group Holding Ltd. and Temu owner PDD Holdings Inc. dominate retail. The deal comes as a property crunch, market volatility and uncertain job prospects weigh on Chinese consumption.
Representatives for Walmart, JD.com and Morgan Stanley did not immediately respond to requests for comment.
Wal-Mart’s Sam’s Club has been a rare bright spot for the company. In China, the unit offers luxury membership goods and has made inroads into the supermarket business. But the company’s other outlets have struggled as rivals chase cash-strapped shoppers.
Last week, Alibaba — long an industry barometer — surprised investors when it revealed that its core e-commerce business actually contracted in the second quarter of the year.
The overall consumer environment is deteriorating and growth is evaporating amid economic uncertainty. JD.com’s second-quarter results beat expectations — even though revenue grew by just 1.2%. That extended a string of single-digit quarters dating back to 2022, a period of stagnation that has halved its market value since the start of last year.
The sale of shares will mark the end of a partnership between the two companies that began when Walmart acquired a 5% stake in the Chinese company in 2016.
The deal also included JD.com’s acquisition of Walmart’s online marketplace Yihaodian, which focused on selling groceries to high-income female shoppers in major Chinese cities, the companies said at the time. Later that year, Walmart increased its stake in JD.com to 10.8%.
–With assistance from Edwin Chan and Daniela Wei.
(Updates on Hong Kong stocks in the third paragraph)
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