Walmart Eyes Mexico Grocery Delivery With $225 Million Purchase
(Bloomberg) -- Walmart Inc. is snapping up a popular app for grocery deliveries in Mexico.
The company agreed to purchase Cornershop, which also offers a shopping-delivery service in Chile, for $225 million. Walmart will subsequently sell Cornershop’s operations in Mexico to its local subsidiary, Walmex, at a yet-to-be-determined price. The transaction is expected to close this year.
Walmex, Mexico’s biggest supermarket chain, is following its U.S. parent by expanding aggressively in e-commerce. Mexico’s potential is already drawing the attention of rivals such as Amazon.com Inc., which started a food-and-beverage delivery service for its Prime clients there. Amazon also has a deal with Fomento Economico Mexicano SAB to use its vast network of Oxxo convenience stores as delivery centers where shoppers can pick up their orders.
News on the acquisition sent Walmex shares up 4 percent on Thursday, widely outperforming Mexico’s benchmark index. Barclays reiterated its overweight rating for the company’s stock saying the deal will foster its position as a leading food retailer. Banorte-Ixe stuck to its hold rating as it considers the company’s valuation high.
Cornershop is a three-year-old company, founded by two Chileans and a Swede, that has caught on with Mexican shoppers. Walmex will offer Cornershop users goods at the same prices as in the company’s physical stores, initially in Mexico City, Guadalajara and Monterrey.
In June, Walmex announced that it was hiring Ignacio Caride, a long-time Mercado Libre executive with a keen knowledge of the Mexican market, to lead its online efforts.
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