KKR and Rakuten Complete Seiyu Share Purchase from Walmart
KKR, Rakuten, Inc., (“Rakuten”) and Walmart Inc. (“Walmart”) today announced that KKR and Rakuten subsidiary, Rakuten DX Solution, have completed their previously announced share purchases in Seiyu GK (“Seiyu” or the “Company”) from Walmart.
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With the completion of the transactions, KKR owns a 65% stake in Seiyu and Rakuten DX Solution owns a 20% stake in the Company. Walmart retains a 15% stake in Seiyu. KKR is making its investment from its Asia private equity fund.
The new ownership structure enables Seiyu to take advantage of KKR, Rakuten and Walmart’s combined retail expertise and innovation, in addition to accelerating Seiyu’s digital transformation to become Japan’s leading omnichannel retailer.
KKR, Rakuten and Walmart are committed to supporting Seiyu’s growth and long-term strategy in Japan and look to build on Seiyu’s success as a local-value retailer of choice. In 2020, Seiyu achieved its highest sales and profitability levels of the last decade, with net sales growing by 5.6% to JPY785 billion1. This generated an EBITDA2 margin of nearly 5%. Over the past two consecutive fiscal years, Seiyu gained market share and improved profitability. Cumulatively over this period, Seiyu comparative-store sales grew 180 basis points faster than the market3 and EBITDA increased by nearly 40%. In addition, Rakuten Seiyu Netsuper, jointly operated by Seiyu and Rakuten, recorded a nearly 40% year-on-year increase in gross merchandise sales in the fourth quarter of 2020. With the significant increase in demand for online supermarkets in recent years, a dedicated fulfillment center began operations in Yokohama, Kanagawa Prefecture in January 2021, and a new fulfillment center is scheduled to open in Ibaraki, Osaka Prefecture within the year to meet this growing demand.
Today, the shareholders additionally confirmed the appointment of Mr. Tsuneo Okubo as CEO of Seiyu to lead the Company into its next phase of development and growth, effective immediately. Mr. Okubo’s decades-long career in Japan’s retail sector includes senior roles for national supermarket chains. He brings to Seiyu a strong track record of elevating corporate strategies and performance through digital innovation, enhancing the operations of physical stores, and localizing businesses to meet the evolving needs of shoppers in communities across Japan.