The Financial Times reports that Walmart has decided to bail out of its joint venture with Bharti Enterprises in India, a move that comes "in the aftermath of a series of regulatory investigations and concerns over international investment rules for the country’s retail sector."
By buying out Bharti's 50 percent position in the venture, Walmart will now have sole ownership of 20 wholesale stores in India and will focus only on wholesale operations there, ignoring for the time being the retail side of the business. FT notes that this decision "is likely to be seen as a further blow to attempts by India’s government to attract major global retailers into the country." The Indian government last year "changed regulations to allow international supermarket groups to own up to 51 per cent of their Indian operations, but no major grocery chains have taken advantage of the opening. Walmart has complained frequently about restrictions under the new ownership rules."
Once the business divorce has been finalized, Bharti will have, among many other interests, a chain of Easy Day-brand convenience stores.
By buying out Bharti's 50 percent position in the venture, Walmart will now have sole ownership of 20 wholesale stores in India and will focus only on wholesale operations there, ignoring for the time being the retail side of the business. FT notes that this decision "is likely to be seen as a further blow to attempts by India’s government to attract major global retailers into the country." The Indian government last year "changed regulations to allow international supermarket groups to own up to 51 per cent of their Indian operations, but no major grocery chains have taken advantage of the opening. Walmart has complained frequently about restrictions under the new ownership rules."
Once the business divorce has been finalized, Bharti will have, among many other interests, a chain of Easy Day-brand convenience stores.
- KC's View:
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Amazing what happens when you cannot depend on a government to be consistent.
