LESSON 12

The Why Matters

IN AN unusual strategic disposal, Walmart sold its McLane Company division to Warren in a $1.45 billion deal in 2003. McLane is an example of a firm that didn’t really fit as a holding of the giant retailer but was a welcome addition to Warren’s collection of companies. But why?

McLane, based in Temple, Texas, was one of the nation’s largest wholesale distributors of groceries and nonfood items to convenience stores, drugstores, wholesale clubs, mass merchandisers, quick-service restaurants, theaters, and other establishments. It had been acquired by Walmart back in 1990.

But why would Walmart want to sell? Revenues were not the problem. Prior to the acquisition in 2003, McLane had annual sales of about $22 billion. ...

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