beyondbrics

The world’s biggest retailer is leaving Russia empty-handed. Walmart announced on Monday that it is closing its Moscow office, saying that – for now at least – it does not see any potential takeover targets there that would justify the notoriously cost-conscious retailer leaving the office lights on.

The move ends almost three years of very public pursuit of a deal in Russia that began with the appointment in early 2008 of Stephan Fanderl, a former executive with Metro, the German retailer that is one of Walmart’s global rivals, with the job of looking for takeover targets in Russia and eastern and central Europe.

Mr Fanderl moved on in early 2009, but the US retailer seemed to remain optimistic. Last year, a member of its Moscow office even gave a brief presentation on the potential opportunities in Russia to its annual shareholders’ meeting, dressed in Russian national costume.

Earlier this year, Walmart was widely reported to be in talks about a possible takeover of Lenta, which operates a chain of hypermarkets, and whose shareholders include TPG, the private equity group, and the European Bank for Reconstruction and Development. But prospects of a deal there dimmed in September when a dispute between rival shareholder groups over the CEO’s position led to a violent fracas at its annual meeting.

News of Walmart’s Moscow office closure came a week after Russia’s X5, part of the Alfa Group, announced a $1.7bn deal for Kopeika, a discount store chain, suggesting that Kopeika may have been the last potential target for the Americans.

Walmart remained characteristically upbeat about the potential of the Russian market, leaving open the possibility of a deal sometime in the future.

Related reading:
Walmart to close Moscow office, FT
Russia: is Walmart still shopping?, beyondbrics (Oct. 15)