KKR and Raghuden to buy 85% Siu from Walmart

TOKYO – US investment firm KKR and Japanese e-commerce company Raguden on Monday announced the acquisition of 85% of the Japanese supermarket chain Siu, owned by US retailer Walmart.

KKR will hold 65% of the Cheyenne business and Raghuden will get 20%. Walmart will catch up with the rest. The three companies agreed to the deal worth 172.5 billion yen ($ 1.6 billion).

The announcement confirms Nikkei’s previous report on the two companies’ investment in CEU. The transaction is expected to be completed in the first quarter of 2021, with regulatory approval pending. KKR, Raghuden and Walmart plan to jointly run Siu.

As the demand for home supply expands amid COVID-19 restrictions, KKR and Raguden see the opportunity to grow Sioux’s business.

KKR will invest from its Asian private equity fund.

Hiro Hirano, Co-Chairman of Asia Pacific Private Equity and Chief Executive Officer of KKR Japan, said: “We will focus on working closely with Xiu’s management team and associates to enhance customer experience and always enhance Raguten & Walmart’s expertise in meeting them. Make shopping more accessible through digitalization. “

Companies are hoping to advance the digital transformation of Xiu’s brick and mortar stores using Ragutan’s e-commerce data.

Xiu operates more than 300 stores in Japan and employs about 35,000 people. Its finances suffered after Japan’s bubble economy exploded, and in 2002 it accepted investment from Walmart. The U.S. retailer became a wholly owned subsidiary in 2008.

Rakuten and Walmart announced an e-commerce-related alliance in Japan in 2018.

Raghuden teamed up with Chew to start an online supermarket that year. It enables delivery from Chiu stores and logistics centers to consumer homes. Demand from home-based shoppers increased, with the online supermarket increasing its sales by 50% in October.

The two are accelerating cooperation and plan to open a large-scale automated warehouse exclusively for online supermarkets in Yokohama next year.

Raguden, Japan’s largest e – commerce platform, has about 100 million members. It operates more than 70 businesses, including online retail and finance, and has recently become the country’s new largest mobile phone carrier.

Raguden is strong in analyzing customer data and hopes that Xiu will help him adjust product choices in his stores and attract more customers. E-commerce is investing in artificial intelligence and robotics technology to improve performance.

Raghuden Group Executive Vice President Kasunori Daketa said: “By building our successful partnership with Raguden Xiu Netsuper and our in-depth experience of online retail and data-based marketing, we look forward to accelerating the brick and mortar digital transformation of Xiu to the retailer, OM Combining better offline and online retail [online merges with offline] Customer experience. “