Wal-Mart had previously launched a business in Indonesia at Supermal Karawaci, which they shut down in 1998. (Photo: Wal-Mart/Matahari/FIS)

Wal-Mart looking to re-enter Indonesian market

Retailing giant Wal-Mart is reportedly considering bid for Matahari Putra Prima’s hypermarkets and supermarkets worth as much as USD 1 billion. This would bring the retailer to Indonesia for the first time in a decade. 

Wal-Mart is working to expand its global reach following over a year of withering US same-store at its stores. Barclays Capital is counseling the retailer on the deal. 

Hypermart is Indonesia’s second top hypermart chain after Carrefour Indonesia. Matahari is selling the 82 hypermarkets and supermarkets spread across the country so it can put emphasis on its central health care and property assets. 

The sale may go for anywhere between USD 800 million to USD 1 billion, reports Reuters. 

Wal-Mart is up against South Korean juggernaut Lotte Shopping and private equity fund Carlyle Group in the bidding war. 

"We have been looking for opportunities to expand abroad, especially in the retail sector," said a Lotte spokesperson, Warc reports.

The auction will allow international and regional retailers to buyout funds and influentially enter the Indonesian market, where analysts expect consumer spending to climb along with a burly economic growth. The per-capita income of 237 million Indonesian consumers is approaching USD 3,000. 

Matahari shares have shot up by around 70 per cent thus far in 2010, thus supporting some analysts’ expectations and widely exceeding 42 per cent rise in the bar Jakarta Composite Index. 

Lotte and Carlyle have already submitted first-round bids. 

“You are going to start seeing some very competitive forces taking place to get the deals,” said Edward Gustely, a private equity specialist and senior adviser to the Indonesian Finance Ministry. 

Previously, Wal-Mart had launched a business in Indonesia at Supermal Karawaci, formerly known as Lippo Supermall, in Karawaci, Tangerang. Wal-mart shut down the store following arson in the 1998 riots. 

French retailing giant Carrefour announced a Friday deadline for the sale of its Southeast Asian assets, which exclude Indonesian stores, in a USD 1 billion transaction.

Aeon, Japan’s chief retailer, plus private equity group Navis Capital may submit second-round bids for Carrefour’s regional businesses. 

Lippo Group is the largest shareholder of Matahari.

Related articles:

- Carrefour retreats from Malaysia: govt 
- Wal-Mart reaps higher profits 

By Natalia Real
editorial@seafood.media
www.seafood.media

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