Walmart has sold its majority stake in Seiyu, a Japanese supermarket chain.
Walmart is an American company that runs many shops under its brand name – Wal Mart. Their shops are not like our regular small shops. These are large shops where one can buy almost anything – from nails to food!
What is Majority Stake?
Suppose there is a house. Your mom owns half of it and her friend owns the other half.
Now, suppose the friend wants the house for herself. So, she says to your mom: “Let me pay you some money, and I want to own more than half of the house.” Your mom also loves the house, so she agrees to take some money and let her friend own 80% of the house. Your mom’s friend now has majority stake in the house (owns more than 50%) and your mom has minority stake (owns less than 50%).
What does this mean for Walmart?
After the sale, Walmart will own only 15% of the company. This
means that Walmart will not be able to take decisions on how the company should be run.
Seiyu has not been making profits for a very long time. Walmart started a tough cost cutting exercise in the company. In 2019, finally, Seiyu reported a small profit.
Not the first time
Walmart has already left Britain and Argentina because of the tough
competition in these countries. In 2006, it left South Korea for the same reason. In India, Walmart is expanding by buying shares in Flipkart, which is an online e commerce supermarket
(supermarket: a place where many things are available).