8-KOther EventsExhibits & Filings

Walmart Inc. 8-K Report, Corporate Update (Jun 20, 2016)

Filed June 20, 2016For Securities:WMT

Summary

Walmart Inc. (WMT) announced a significant strategic alliance with JD.com, Inc. (JD), China's largest e-commerce company, on June 20, 2016. This transaction involves Walmart selling its Yihaodian marketplace business, including its brand, website, and app, to JD. In return, Walmart received approximately 5% of JD's outstanding ordinary shares on a fully diluted basis. This alliance is designed to enhance Walmart's online presence in China by making its China operations a preferred retailer on JD's O2O platform and establishing Sam's Club China as a flagship store on JD's marketplace with preferred placement. While Walmart divested its direct e-commerce marketplace assets in China, it retains the ability to operate its existing digital platforms and physical stores. The company anticipates this transaction will positively impact diluted earnings per share from continuing operations by approximately $0.16 to $0.19 in the second quarter of fiscal year 2017.

Key Highlights

  • 1Walmart forms a strategic alliance with JD.com, Inc., China's largest e-commerce company.
  • 2Walmart sells its Yihaodian marketplace business, including brand, website, and app, to JD.com.
  • 3Walmart receives approximately 5% of JD.com's ordinary shares (fully diluted basis) as consideration.
  • 4Walmart China becomes a preferred retailer on JD's O2O platform.
  • 5Sam's Club China will operate as a flagship store on JD's marketplace with preferred placement.
  • 6Walmart retains rights to operate its existing digital platforms and physical stores in China.
  • 7Transaction is expected to increase diluted EPS from continuing operations by $0.16-$0.19 in Q2 FY2017.

Frequently Asked Questions

Walmart is partnering with JD.com, a leading Chinese e-commerce company, to enhance its online presence in China. This involves selling its Yihaodian marketplace business to JD.com and receiving JD.com shares in return. Walmart's China operations and Sam's Club China will gain preferred status on JD.com's platforms.

Walmart sold the Yihaodian marketplace business, which includes the Yihaodian brand, its website, and its app, to JD.com.

Walmart received newly issued Class A ordinary shares of JD.com, representing approximately 5% of JD.com's outstanding ordinary shares on a fully diluted basis.

No, Walmart can continue to operate its existing digital platforms in China, including the Walmart China and Sam's Club websites and apps, and sell products through walmart.com. Its physical store and club operations in China are also unaffected. However, Walmart will not engage in other direct e-commerce sales, marketplace, or O2O platforms in China under this alliance.

Walmart estimates that this transaction will increase its diluted earnings per share from continuing operations by approximately $0.16 to $0.19 in the second quarter of fiscal year 2017.