Sunil Mittal's Bharti Enterprises and Walmart today said they are parting ways to operate retail stores independently in India, ending speculation over the future of their six-year-old partnership.
The US retail major will buy out its Indian partner in their 50:50 cash-and-carry joint venture Bharti Walmart, which runs 20 wholesale stores under the Best Price Modern Wholesale brand in India, for an undisclosed sum.
Bharti will acquire USD 100 million of Compulsory Convertible Debentures (CCDs) held by Walmart in Cedar Support Services, a company owned and controlled by the Indian firm. It will continue to run its 'easyday' retail stores on its own.
In a joint statement, the companies said they have reached an agreement to independently own and operate separate business formats in India and discontinue their franchise agreement in the retail business.
The agreement is subject to finalisation of definitive agreements and requisite regulatory approvals, it said.
Bharti Enterprises Vice Chairman and MD Rajan Bharti Mittal said: "Bharti is committed to building a world-class retail venture and will continue to invest in Bharti Retail across all formats. We believe that with our current footprint of 212 stores, we have a strong platform to significantly grow the business..."
Walmart said it plans to continue to grow its "business while working with the government and interested stakeholders to create conditions that enable foreign direct investment (FDI) in multi-brand retail."
"Given the circumstances, our decision to operate independently will be beneficial to both parties," Walmart Asia President and CEO Scott Price said.
The two partners joined hands in 2007 and launched their first Best Price Modern Wholesale cash-and-carry store in Amritsar in May 2009.
Asked about the financial details of the separation, a Walmart India spokesperson said: "We are currently working with Bharti to finalise the terms of the agreement and transition arrangement. If and when we reach a definitive agreement on transaction terms, we will provide further financial information as appropriate."
In a separate development, former Walmart India head Raj Jain has been roped in as an advisor by the Bharti group.
Confirming the development, Jain said: "The appointment will be effective soon, but I cannot share the details of my role right now."
While Bharti and Walmart did not specify the reasons for the split, sources said Bharti was getting anxious with Walmart's approach towards