U.S. supermarket giant Walmart Inc. could be staring at a cut-price sale of its Brazilian operations after potential bidders reportedly found that the unit owes about $3 billion in back taxes to various state governments, Reuters reported March 7, citing "three people with knowledge of the matter."
Walmart, which is reportedly in talks with Advent International Corp., GP Investments Ltd. and ACON Investments LLC to sell a major stake in its Brazilian business, had operational issues managing its taxes in the country, one of the sources told the newswire. The three investment firms reportedly became aware of the unpaid taxes when they checked the company's records in January.
The report said the highest tax liabilities come from the states of Santa Catarina and Pernambuco, where the retailer bought regional supermarket chains over a decade ago. The states are filing a lawsuit against Walmart and at least two of its CEOs in the country over the unpaid taxes, Reuters said, citing regional court documents.
Walmart representatives in the country told Reuters that the company "does not comment on market speculation." Advent declined to comment, while Acon and GP Investments did not immediately reply to requests, the newswire said.
