Bharti, Wat-Mart go separate ways

Bharti Enterprises and Wal-Mart run wholesale (or cash-and-carry) stores called Best Price Modern across

New Delhi: Bharti Enterprises Ltd and Wal-Mart Stores Inc. have called off their Indian joint venture Bharti Wal-Mart, bringing to end the troubled saga of the company that runs wholesale (or cash-and-carry) stores called Best Price Modern across India.

The break-up has been in the air, especially after recent statements by Bharti chairman and Wal-Mart Asia CEO  that the two partners were evaluating the joint venture.

Wal-Mart will acquire Bharti’s 50% stake in the joint venture, giving the US retailer 100% holding in the Best Price Modern stores.

Bharti will, for its part, acquire the debentures held by Wal-Mart in Cedar Support Services, the holding company of  that runs the  chain of retail stores. The debentures were sold, and indirect control and management ceded to Wal-Mart by the Indian company at a time when foreign direct investment (FDI) wasn’t allowed in supermarkets (or so-called multi-brand retail).

Wal-Mart said in a statement that it would continue to work with the government to create “conditions that enable FDI in multi-brand retail”. India does allow this, but with conditions that many foreign retailers, including Wal-Mart, find unpalatable.

vice-chairman and MD, Bharti Enterprises, 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 and delight customers. We wish Walmart the very best for the future.”

president and CEO, Walmart Asia, said: “Given the circumstances, our decision to operate independently will be beneficial to both parties. Through Walmart’s investment in India, including our cash and carry business, supply chain infrastructure, direct farm programme and supplier development, we want to serve India and its people, and continue to make important social and environmental contributions to the country. Walmart is committed to businesses that serve our members and provide good returns for our shareholders, and we will continue to advocate for investment conditions that allow FDI multi-brand retail in India. We wish Bharti well as they grow their retail business.”

RANJAY KUMAR

PGDM 1st Year