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Walmart’s Considering Options for Central America Business

Walmart is turning its focus to its Mexican operations.

Walmart de México S.A.B. de C.V. (Walmex) said on Monday that it is “considering strategic alternatives regarding its operations in Honduras, El Salvador and Nicaragua as its focuses efforts and capital on its core businesses and geographies.” Walmex said. The alternatives include joint ventures, strategic partnerships or alliances, a sale or other transactions. The Walmex operation will continue to include the businesses in Costa Rica and Guatemala.

“All of our operations in Central America are strong businesses with a differentiated customer value proposition, world-class and well-invested infrastructure, a significant growth runway and strong fundamentals,” Guilherme Loureiro, executive president and CEO of Walmart de México y Centroamérica, said. “As we seek to prioritize our resources and accelerate our ecosystem in Mexico, Costa Rica and Guatemala, we believe there may be attractive opportunities for further growth in Honduras, El Salvador and Nicaragua that could be better captured under a different structure.”

Walmex also cautioned that there is no guarantee that the evaluation will result in any transaction.

Walmart’s first store outside of the U.S. was a Sam’s Club in Mexico City in 1991. The discounter went on to acquire a majority stake in Cifra S.A. de C.V., Mexico’s largest retailer, in 1997, and three years later renamed the business Walmart de Mexico. The company is known locally as Walmex. Walmart entered the Central American market in 2005 and became Walmart Centroamérica in 2006. Three years later, Walmex acquired the operations in Central America and the company was renamed Walmart de Mexico y Centroamérica in 2010, with headquarters in San Jose, Costa Rica

The Bentonville, Ark.-based mass discounter periodically reviews its operations. In October 2020, the company decided to sell a majority stake in its U.K. supermarket chain Asda. But instead of selling the company entirely, it elected to retain a minority investment. The investment also allows it to keep board representation and remain active as a strategic partner via logistics and sourcing.

The mass discounter also acquired for $3.3 billion in 2016, a move to help it compete against Walmart invested in other business too, some of which it later sold as it built out its e-commerce platform. In May 2020, Walmart elected to discontinue its operation.