USA: Wal-Mart to sell grocery distributor McLane to Berkshire Hathaway
US retail giant Wal-Mart Stores has announced that it has entered into an agreement for the sale of grocery distributor McLane, a wholly owned subsidiary of Wal-Mart, to holding company Berkshire Hathaway.
Temple, Texas-based McLane is one of the US’ largest wholesale distributors of groceries and nonfood items to outlets such as convenience stores, wholesale clubs, mass merchandisers, quick service restaurants and theatres. It was acquired by Wal-Mart in 1990.
Wal-Mart said the sale would allow the retailer to focus completely on its core retail business.
The sale is subject to regulatory approval. This is expected to occur by the end of June.
Wal-Mart also announced that it has signed a letter of intent to sell Merit Distribution Services, a wholly owned subsidiary of McLane, to Swift Transportation, a Phoenix-based national truckload carrier. Merit provides long-haul, over-the-road trucking services to a number of companies, including Wal-Mart's grocery distribution centres and retail outlets throughout the US.
Proceeds from the McLane and Merit transactions will total approximately US$1.5bn. Excluding a one-time gain, Wal-Mart said the transaction will have a dilutive effect on the company's earnings of approximately US$0.01 per share in fiscal 2004 and approximately $0.02 per share in fiscal 2005.
Companies: Wal-Mart Stores
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