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Walmart Inc. is in advanced talks to sell a majority stake in its U.K. grocery chain Asda Group Ltd. to rival J Sainsbury PLC according to people familiar with the situation, a sign that the retail behemoth aims to reduce risk in one of the world’s most competitive markets as local players consolidate.
Such a deal would create a U.K. food giant with combined revenue of about £50 billion ($68.9 billion), according to the latest available financial results.
In a brief statement Saturday, Sainsbury, which has a market value of $8.16 billion, confirmed the talks and said it would make a further announcement Monday. Walmart will take a stake of about 40% in the new entity, according to a person familiar with the situation.
The U.K., where Walmart operates about 600 Asda stores, is the Bentonville, Ark., retailer’s biggest overseas market by revenue. It agreed to acquire Asda in 1999 for about $10.8 billion as part of the U.S. retail giant’s goal at the time to double its international operations.