business news in context, analysis with attitude

As reported here on MNB last Friday, Wal-Mart Stores Inc. will sell its McLane Inc. distribution unit to Warren Buffett's Berkshire Hathaway Inc.

This was, to be sure, a topic of much conversation on the FMI floor. Speculation about why Wal-Mart made the sale centered on three basic scenarios:

  • Wal-Mart may have been concerned about unionization of its distributor business, and decided to bail out before it happened.

  • Wal-Mart believed that some of the economic issues that have afflicted Ahold's US Foodservice division might be in play for its own distribution business, and decided to bail out

  • Wal-Mart wanted the money to make a big retail acquisition.

KC's View:
We have no special insight on this issue…though we suspect that #'s 1 and 2 seem more likely than the third option.

But you never know.