Bulletin: Walmart Inc.'s Announced Sale Of British Grocery Unit Asda To J Sainsbury Is A Slight Credit Positive; Ratings Unchanged

NEW YORK (S&P Global Ratings) April 30, 2018--S&P Global Ratings said today that Walmart Inc.'s announcement that it will sell its British grocery subsidiary Asda Group Ltd. to J Sainsbury plc (not rated) is a slight credit positive given cash proceeds and a step back from the U.K.'s highly competitive supermarket sector. However, our ratings on Walmart (AA/Stable/A-1+) remain unchanged, with the transaction expected to be slightly dilutive in the first full year following the completion of the deal and up to slightly accretive in subsequent years with synergies, according to company estimates. Under the terms of the merger, Walmart would hold 42% of the combined entity and receive $4.1 billion in cash, valuing Asda at more than $10 billion

...NEW YORK (S&P Global Ratings) April 30, 2018--S&P Global Ratings said today that Walmart Inc.'s announcement that it will sell its British grocery subsidiary Asda Group Ltd. to J Sainsbury plc (not rated) is a slight credit positive given cash proceeds and a step back from the U.K.'s highly competitive supermarket sector. However, our ratings on Walmart (##/Stable/A-1+) remain unchanged, with the transaction expected to be slightly dilutive in the first full year following the completion of the deal and up to slightly accretive in subsequent years with synergies, according to company estimates. Under the terms of the merger, Walmart would hold 42% of the combined entity and receive $4.1 billion in cash, valuing Asda at more than $10 billion on a debt-free, cash-free, and pension-free basis according to the company. The acquisition has been Walmart's biggest, given it purchased Asda in 1999 for $10.8 billion. Similar to in the U.S., we believe the combination of Amazon.com Inc.'s more aggressive...

Bulletin