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Walmart Inc, the world’s largest retailer, said on Friday it was selling its retail operations in Argentina to South American supermarket chain owner Grupo de Narváez, pulling back as the country grapples with an economic crisis.

The U.S. company did not disclose the size of the deal for retail operations involving more than 90 stores, but said it would record about a $1 billion after-tax, non-cash loss related to the divestiture in its fiscal third quarter next year.

The sale comes as Argentina, mired in recession since 2018, has just emerged from a sovereign default and is grappling with a currency crisis. The government has been fending off talk that international firms are looking for the exit.

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“In Argentina you see a phenomenon of firms divesting, and companies changing hands, reflecting a lack of confidence in the direction of the country,” said Guido Lorenzo, economist at consultancy LCG, adding there was huge uncertainty over policy.

“Argentina lacks clear rules of the game.”

Walmart sold the majority of its unit in Brazil in 2018, though it maintains major operations in Chile and Mexico. The exit from its business in Argentina, where it began operating in 1995 and currently has some 9,000 employees in 92 stores, would include its popular Changomas and Punto Mayorista chains.

Banorte analyst Valentin Mendoza said Walmart’s exit from Argentina indicated it was doubling down on operations where it was already a market leader in Latin America such as Mexico, where it could leverage its dominant position better.

MYTH OF AN EXODUS

Argentina is headed for an economic decline of nearly 12% this year, exacerbated by the coronavirus pandemic.

The country has imposed capital controls as it battles a currency crisis, and recently restructured over $100 billion of foreign currency debt with local and international creditors.

The economic malaise and uncertainty have hit corporations in the country and led to others pulling back, including LATAM Airlines Group and department store owner Falabella.

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The government has sought to downplay the narrative that international firms are ditching the country over what critics have described as anti-investment policies, and say plans to revive growth will attract funds once again.

“Although the global and local scenario is complex, and despite the myth of an ‘exodus’, the truth is there are firms continuing to bet on the country and announce investments every week,” the ministry of development said in a report this month.

Thomaz Favaro, a regional director at consultancy Control Risks, said firms were concerned about Argentina’s public finances along with a “wide range” of political risks including capital controls, export taxes and expropriations.

“We advise companies in investments across emerging markets and declining interest in Argentina over the past two years is notable,” he said.

Following the acquisition, family-owned Grupo de Narváez will own 656 stores, including supermarkets, and apparel and home appliance outlets in nine countries, including Ecuador and Uruguay, and employ more than 24,500 workers.

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