Walmart sells JD.com stake amid challenging times for Chinese tech giants

Bloomberg and staff reporters

Walmart has sold 144.5 million shares in Chinese e-commerce firm JD.com at US$24.95 (HK$194.45) apiece, an 11 percent discount to its Tuesday's close in the US, winding down an eight-year partnership that appears to be paying diminishing returns amid a challenging landscape for Chinese tech giants

The US retailer raised US$3.65 billion through its stake sale. At US$24.95, the price was also near the lower end of an indicative US$24.85 to US$25.85 price range, according to sources.

JD.com's Hong Kong-listed shares fell more than 12 percent to HK$98.7 at one time yesterday. Its shares then slightly recovered and closed 8.7 percent lower at HK$102.4.

JD.com said it was not aware of any other reasons for the drop in share prices yesterday.

Walmart is refining its strategy in the world's second-largest economy, where its long-standing e-commerce partner is struggling along with traditional rivals Alibaba Group and Temu-owner PDD Holdings.

The US firm has built a mature e-commerce and delivery system in China for both Sam's Club and its hypermarket business and is focusing on its own offerings, a person familiar with the matter said. The deal also comes as a property crisis, market volatility and uncertain job prospects take a toll on Chinese consumption.

Morgan Stanley is the broker-dealer handling the offering, according to people familiar with the situation.

The sale will enable Walmart to "better focus on the country's strong development" including Sam's Club and its hypermarket business, and "allocate funds to other priorities," according to a statement from the company. The retailer said it will continue to cooperate with JD.com, describing the Chinese e-commerce firm as a "precious partner."

JD.com has confidence in future collaboration between the two companies, it said in a statement.

This came as JD.com bought back US$390 million of its shares yesterday, fully utilizing the repurchase amount under its US$3 billion share buyback plan approved in March.