U.S. retail giant Walmart Inc. said Monday it will sell a majority stake in its wholly owned Japanese supermarket unit Seiyu GK to American investment company KKR & Co. and Japanese e-commerce firm Rakuten Inc., in a 172.5 billion yen ($1.6 billion) deal.

KKR will acquire 65 percent of Seiyu and Rakuten will take a 20 percent stake through a newly created subsidiary to accelerate the retailer's digital transformation. Walmart will retain the remaining 15 percent stake.

The transaction is expected to be completed in the first quarter of 2021, according to Walmart.

The companies aim to grow online shopping through the partnership and introduce a new cashless payment option, Walmart said.

"We will focus on working closely with Seiyu's management team and associates and leveraging the expertise of Rakuten and Walmart to enhance the customer experience, meet their ever-changing needs, and make shopping more accessible through digitalization," Hirofumi Hirano, co-head of Asia Pacific Private Equity and CEO of Japan at KKR, said in a statement.

Seiyu and Rakuten have maintained an e-commerce partnership since 2018.

Kazunori Takeda, group executive vice president at Rakuten, expressed hope that the acquisition will allow for further merging of "the best of offline and online retail."

"The planned establishment of Rakuten DX Solution will also allow us to offer digital solutions optimized to transform retail at Seiyu and in new future partnerships with retailers across Japan," Takeda said, referring to the new subsidiary.

==Kyodo

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