Bharti Enterprises and the US-based retail giant Wal-Mart Stores Inc. have decided to end their joint venture in India. The news of the split was announced in the two companies' joint statement on October 9, 2013.
Wal-Mart is the biggest retailer in the world and the company decided to pursue a joint venture with Bharti in 2007, however, after the announcement, Wal-Mart will be operating a separate business in the country. The company's growth in India has been facing hindrances when it comes to foreign investment, an internal bribery probe and the failed partnership with Bharti is another problem that the company has to deal with now.
The terms of the split state that Wal-Mart will acquire 50% stake in Bharti Wal-Mart Pvt Ltd, which has about 20 wholesale store in India under the Best Price Modern Wholesale Brand and will run the business independently. Scott Price, the president and chief executive of Wal-Mart Asia in a statement said, “Given the circumstances, our decision to operate independently will be beneficial to both parties”.
In a statement released on October 9, 2013, Wal-Mart said that it continues to be committed to businesses which serve their members and offer good returns for their shareholders and that they will continue to promote investments conditions which enable FDI multi-brand retail in India. Meanwhile, Bharti Retail will continue to operate its easyday chain.
Photo credits: Vancouver sun