Perspectives from ISB

Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores and grocery stores. The company was founded by Sam Walton in 1962 and today has 11,539 stores and clubs in 28 countries. It is the world’s largest company by revenue, according to the Fortune Global 500 list in 2016, as well as the largest private employer in the world with 2.2 million employees. Walmart is a family-owned business, as the company is controlled by the Walton family.

 A series of share repurchases in recent years have lifted the Waltons’ ownership to about 50%. However in order not to exceed this threshold of ownership, the family created the Walton Family Holdings Trust. Walton Enterprises LLC, the family’s main investment entity, distributed about 6 percent of its shares to the trust in April 2015. The trust now owns about 170 million shares of the business, a fraction of the 1.4 billion shares held by Walton Enterprises. Together the two entities own 51 percent of the retailer.

 In a recent development, the Walton Family Holdings Trust sold $256 million of Wal-Mart Stores Inc. The trust unloaded 3.5 million shares at prices ranging from $72.45 to $74.28 on Aug. 19 and 22. Those transactions follow $104 million of sales at the end of June at prices between $70.67 and $71.86. The family plans to sell shares from time to time to help fund charitable contributions and offset possible further increases in its ownership percentage as a result of the company’s stock buyback programs. However analysts argue that the main motive of the trust is to avoid estate taxes.

 Source: Bloomberg


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