Walmex of México Acquires Walmart Centroamérica
Walmart of México, also known as Walmex, has acquired 100% of the stock of Walmart Centroamérica. The acquisition includes the 51% stake held by Walmart Stores, Inc. (of the U.S.) and the remaining 49% held by partners in Costa Rica (CSU) and Guatemala (La Fragua). The transaction will take place primarily in 593 million new shares of Walmex stock. A smaller portion, $110 million, will be paid in cash. As a result of announcement of the deal, shares of Walmex shot up 3.19% to 58.1 pesos (or, a little over $4.00) on the Bolsa Mexicana. In addition to the initial compensation, Walmex will issue an additional 55 million shares in an “earnout.” These shares will be kept in treasury and issued to shareholders of Walmart Centroamérica once the merged entity reaches a predetermined level of profitability. The deal also gave the shareholders of Walmart Centroamérica the opportunity for some participation in corporate governance of the merged entity. The president of Walmex, Eduardo Solórzano, expressed his pleasure about the growth prospects the deal brings for Walmex, adding that this deal is the first time that Walmart Stores, Inc. has shown sufficient confidence in a foreign company (in the case, Walmex) as to allow it to gain control of Walmart’s operations in other countries. Walmex operates 1,410 commercial units in México, including supermarkets, clothing stores and restaurants. Walmart Centroamérica operates 519 units in Central America, plus 11 distribution centers, and employs 30,000 in Costa Rica, Guatemala, Honduras, El Salvador and Nicaragua. For the fiscal year end of September 2009, Walmart Centroamérica had sales of $3.3 billion. With this transaction, Walmex expect to reach sales of $25 billion.
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