Wal-Mart To Sell Division To Metro, Exiting Germany

Wal-Mart to Sell Division to Metro, Exiting Germany

Wal-Mart Stores Inc., the world's largest retailer, will retreat from Germany by selling its 85 stores to Metro AG at a $1 billion loss, two months after exiting South Korea.

The price of the transaction wasn't disclosed. Wal-Mart will incur the $1 billion pretax loss in the second quarter of fiscal 2007, according to a statement released by the Bentonville, Arkansas-based company today. The German unit generated revenue of about 2 billion euros ($2.54 billion) last year.

Wal-Mart has failed to make money in Germany, Europe's largest economy, where consumer spending is sluggish and closely held Aldi and Lidl dominate. Its U.K. unit, Asda, missed all profit and sales goals last year, and Wal-Mart is leaving South Korea after failing to win customers. Metro, Germany's biggest retailer, is buying the stores to gain scale and increase bargaining power with suppliers.