Walmart Inc has raised about US$3.6 billion by selling its stake in Chinese e-commerce firm JD.com Inc (京東), winding down an eight-year partnership that appears to be paying diminishing returns amid a challenging landscape for Chinese technology giants.
The US retailer sold 144.5 million shares for US$24.95 apiece, people familiar with the matter said. That was a discount of 11 percent to Tuesday’s close in the US, according to Bloomberg calculations.
JD.com’s Hong Kong-listed shares yesterday fell as much as 12 percent, leading a broader sell-off in Chinese e-commerce and technology stocks. JD.com also bought back US$390 million of its shares yesterday.
Photo: EPA-EFE
Walmart is refining its strategy in the world’s second-largest economy, where its long-standing e-commerce partner is struggling along with traditional rivals Alibaba Group Holding Ltd (阿里巴巴) and Temu-owner PDD Holdings Inc (拼多多).
The deal also comes as a property crisis, market volatility and uncertain job prospects take a toll on Chinese consumption.
“I expect Walmart will be disappointed with the horse they backed,” said Mark Tanner, managing director at marketing agency China Skinny. “It doesn’t feel like the original ambitions have quite panned out as planned at the time of acquisition.”
The sale would enable Walmart to “better focus on the country’s strong development,” including Sam’s Club and its hypermarket business, and “allocate funds to other priorities,” a company statement said.
The retailer said that it would continue to cooperate with JD.com, describing the Chinese e-commerce firm as a “precious partner.”
JD.com has confidence in future collaboration between the two companies, it said in a separate statement.
Walmart’s Sam’s Club franchise has been a bright light for the company, making it the only hypermarket chain to post sales growth last year among the top five players, according to the China Chain Store & Franchise Association.
In China, the unit offers premium goods with a membership model that is now being copied by rivals, while the company’s other basic hypermarkets are struggling along with competitors.
Walmart is likely to redeploy the capital from the sale to expand its own stores, a Citigroup Inc report said.
JD.com’s second quarter results beat expectations — even though revenue grew a mere 1.2 percent. That extended a string of single-digit percentage quarters dating back to 2022.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS