Wednesday 15 May 2019 8:37 am

Walmart mulls Asda IPO after Sainsbury's merger blocked

Retail giant Walmart has said it is considering a stock market listing for Asda, just weeks after the supermarket’s failed attempt to merge with rival Sainsbury’s.

Walmart International boss Judith McKenna said the US chain is considering an initial public offering (IPO) for its UK subsidiary, but said it was “not rushing into anything”.

Read more: 150 MPs set to demand Asda abandons 'unscrupulous' pay proposals

Speaking to Asda managers in Leeds, she added that any preparations for a float would “take years”.

The comments come weeks after the Competition and Markets Authority (CMA) blocked a proposed £12bn merger between Asda and Sainsbury’s.

The CMA said the tie-up, which would have created Britain’s largest supermarket, would have resulted in “substantial lessening of competition”.

The decision sparked speculation that parent company Walmart would look to sell, with analysts pointing to potential private equity bids.

But McKenna’s comments suggest a float is a more likely option as the world’s largest retailer looks to withdraw from the UK.

“Walmart does not have a one size fits all approach to operating its international markets, but a consistent focus on strong local businesses powered by Walmart,” she said.

Speaking earlier at an industry event in Amsterdam, McKenna also took a swipe at the CMA’s decision to block the merger which she described as a “bold” attempt to lower prices.

Read more: Watchdog kills Sainsbury's-Asda merger: What went wrong?

Asda has benefited from its recent price-cutting strategy, posting seven consecutive quarters of like-for-like sales growth. The supermarket will be hoping to continue its run of growth when it reports on first-quarter trading tomorrow.

Chief executive Roger Burnley told staff in Leeds yesterday Asda will cut £80m in prices over the rest of the year.