Walmart said to raise US$3.6 billion from sale of JD.com stake, ending 8-year partnership

The deal comes as a property crisis, market volatility and uncertain job prospects take a toll on consumption in mainland China

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Walmart’s share sale would mark the end of its partnership with JD.com that started in 2016. Photo: Reuters

Published: 2:24pm, 21 Aug 2024Updated: 3:12pm, 21 Aug 2024

Walmart is raising about US$3.6 billion by selling its stake in e-commerce firm JD.com, winding down an eight-year partnership that appears to be paying diminishing returns amid a challenging landscape for Chinese tech giants.

The US retailing giant sold 144.5 million shares for US$24.95 apiece, according to people familiar with the matter, who asked not to be identified because the information is private. That is a discount of 11 per cent to Tuesday’s close in the US, according to Bloomberg calculations and near the lower end of an indicative US$24.85 to US$25.85 price range.

Morgan Stanley is the broker-dealer handling the JD.com offering, according to people familiar with the situation. JD.com also bought back US$390 million worth of its shares on Wednesday.

JD.com’s Hong Kong-listed shares fell 10 per cent to HK$101.10 at 2.23pm local time on Wednesday, leading a broader sell-off in Chinese e-commerce and tech stocks.

Walmart is refining its strategy in the world’s second-largest economy, where its long-standing e-commerce partner is struggling along with major rivals Alibaba Group Holding and PDD Holdings, owner of Pinduoduo and Temu. Alibaba owns the South China Morning Post.

JD.com has been engaged in an escalating price war in China with major e-commerce rivals, including Alibaba Group Holding and budget retailer Pinduoduo. Photo: Shutterstock

The US firm has built a mature e-commerce and delivery system in mainland China for both Sam’s Club and its hypermarkets business, and is focusing on its own offerings, a person familiar with the matter said, speaking on condition of anonymity.