Rakuten Inc and KKR & Co. have purchased a majority stake in Japanese retailer Seiyu in a deal that values the supermarket chain at $1.6bn.
Under the agreement, private equity fund KKR will become the majority owner with a 65 per cent stake in Seiyu. Rakuten, an e-commerce giant based in Japan will take 20 per cent and Walmart will retain a 15 per cent minority interest.
Walmart first invested in Seiyu in 2002, taking it private in 2008, however due to Japan’s difficult and low-margin supermarket space, the brand has failed to find success in this market which has been the catalyst for this deal.
KKR and Rakuten have announced plans that they intend to grow and develop Seiyu’s digital operations as a result of the growth in online retailing brought on by the Coronavirus pandemic. Hiro Hirano, Co-Head of Asia Pacific Private Equity and Chief Executive Officer of Japan of KKR, commented: “We will focus on working closely with Seiyu’s management team and associates, and leveraging the expertise of Rakuten and Walmart to enhance the customer experience, meet their ever-changing needs and make shopping more accessible through digitalization.”
The deal is expected to close in the first quarter of 2021 pending regulatory approval.
