Britain’s Asda paid parent Walmart $1.52 billion dividend – Metro US

Britain’s Asda paid parent Walmart $1.52 billion dividend

FILE PHOTO: A shopper sits by an Asda superstore sign
FILE PHOTO: A shopper sits by an Asda superstore sign in south London

LONDON (Reuters) – Asda, the British supermarket being sold by Walmart, paid its parent a 1.15 billion pound ($1.52 billion) dividend from surplus cash in March, Asda’s annual report showed on Friday.

In October, the Issa brothers and private equity group TDR Capital agreed to buy a majority stake in Asda from Walmart in a deal giving the chain an enterprise value of $8.8 billion.

Asda, Britain’s third largest grocer after market leader Tesco and Sainsbury’s, said in its report and accounts published on Friday that the dividend payment was made in respect to its 2017, 2018 and 2019 financial years.

It said the payment, the first since 2017, was made after the completion of the 3.8 billion pound “buy in” of its pension scheme with Rothesay Life in October 2019.

Asda said its acquisition by the Issa brothers and TDR was on track to complete in the first half of 2021, subject to regulatory approval.

Britain’s Competition and Markets Authority is probing the deal.

Last year, Walmart’s attempt to sell Asda to Sainsbury’s for 7.3 billion pounds was thwarted by the regulator but analysts see few problems with the latest deal.

Asda’s accounts show its operating profit fell to 584.2 million pounds in 2019 from 803.2 million pounds in 2018, on flat sales of 22.9 billion pounds.

Last month, Asda said like-for-like sales rose 2.7% in the third quarter of 2020.

Industry data has shown Asda’s growth has lagged that of Tesco, Sainsbury’s and Morrisons, partly reflecting Asda’s lack of a local convenience store offer, a format that has proved popular with consumers during the COVID-19 pandemic.

($1 = 0.7579 pounds)

(Reporting by James Davey; Editing by Kate Holton and Edmund Blair)

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