UPDATE 3-Wal-Mart's Mexico unit selling apparel chain for about $852 mln

Wed Aug 10, 2016 7:04pm EDT
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(Adds details of agreement, background)

By Nandita Bose

CHICAGO Aug 10 (Reuters) - Wal-Mart Stores Inc's Mexican unit said on Wednesday it has agreed to sell its Suburbia clothing chain to El Puerto De Liverpool for about $852 million as the world's largest retailer streamlines operations in its largest non-U.S. market.

Wal-Mart De Mexico y Centroamerica, also known as Walmex, will sell Suburbia with its 119 stores and real estate for 15.7 billion pesos ($852 million) including debt of 1.4 billion pesos. Walmex will also receive an additional 3.3 billion pesos in items including declared dividends after the deal closes, it said in a statement.

In January, the retailer said it was looking to sell Suburbia without giving a timeframe for completing the sale. Some Mexican media outlets had speculated the sale could fetch as much as $2 billion.

Liverpool is one of Mexico's department store operators, with more than 100 outlets. Company representatives were not immediately available for comment.

Wal-Mart has been looking to double sales in Mexico by 2024 by boosting its core business of running discount retail and membership stores, and expanding its fresh food business. The divestiture is part of Wal-Mart's strategy, announced in 2013, to streamline and sell businesses not central to its overseas operations.

Wal-Mart's international division, which contributes roughly one-third of the company's total annual sales of nearly $480 billion, has divested some non-core businesses across Chile, Mexico and Canada in the past two years.

In Mexico over the past three years, Walmex has sold its Vips restaurant chain to fast-food operator Alsea SAB for $626 million, and its Banco Walmart unit to Mexican billionaire Carlos Slim's bank Grupo Financiero Inbursa for about $247 million.   Continued...