Private equity giant KKR has increased its stake in Japanese supermarket chain Seiyu to 85% from 65% by buying out Rakuten Group’s stake in the company, per an announcement. The investment is being made out of its Asian Fund IV.
Following the transaction, Rakuten will continue to work closely with Seiyu’s management and shareholders.
“Seiyu aims to become Japan’s No. 1 supermarket and online supermarket by 2025, in line with our medium-term management plan, building on the new management structure introduced in 2021.” said Tsuneo Okubo, President and Representative Director of Seiyu Holdings Co.
Founded in 1963, Seiyu offers customers a broad assortment including fresh food, general merchandise, and apparel products across Japan from Hokkaido to Kyushu. The company has 326 stores all over Japan. Seiyu was acquired by Walmart in 2008.
Walmart entered the Japanese market in 2002 by buying 6% in Seiyu and gradually built up its stake before a full takeover in 2008.
In 2o2o, Walmart sold majority of its stake in the company to KKR and Rakuten Group in a deal valued at about $1.6 billion. KKR bought 65% of Seiyu’s shares, while Rakuten bought 20%. The companies completed their investments in Seiyu in 2021, while Walmart retained a 15% stake.
In an interview with DealStreetAsia, KKR partner Ashish Shastry had mentioned that Japan is a huge opportunity as Japanese conglomerates divest their non-core assets. The deals KKR has done in Japan include acquiring Hitachi Transport System and the $1.67 billion carve-out in 2014 of Panasonic Healthcare, which was then listed on the Tokyo Stock Exchange in October 2021.
KKR made $10 billion worth of new investments and raised $12 billion of new capital in the first quarter, while its private equity portfolio gained 2%, according to Reuters.