Walmart Intercom Systems Inc. (NYSE: WMT) is planning to sell its main intercom and doorbell systems for $1 billion to a Chinese telecommunications firm, according to people familiar with the matter.
The sale of the systems to China, which the company calls a “significant” step in the company’s global push to expand into new markets, is expected to close this year.
The buyout would make Walmart the largest private company to buy intercoms from a Chinese firm, the people said.
Walmarts stock is down more than 6% over the past year.
But its stock has rallied more than 60% since the company launched the systems in the early 2000s.
Walmart also bought the systems from another Chinese company in 2010.
Those deals were not part of the buyout announcement Friday, but they were seen as major steps toward expanding into China, according the people.
Walmart has been expanding into the U.S. and other markets as it tries to compete with companies such as Amazon.com Inc., and is already offering the Intercom Plus platform, which it calls a more advanced version of its Intercom line of doors and intercom devices.
It also has a partnership with the U-Tap company to provide access to its digital store, which allows customers to buy groceries, prescription drugs, household items and other products online.
The company is also expanding its e-commerce operations to more countries.
The Intercoms deal with Walmamps biggest rival would be the largest buyout of an intercom to date.
The acquisition is expected by the end of this year and would be a massive boost for the company, which has struggled to catch up with Amazon and other major retailers in the growing intercom market.
The deal could also boost the stock for Walmampains shareholders, who are holding a $1.5 billion option on the company.
Analysts have predicted that Walmart could be selling some of its intercom business, or some of the other intercom services, to Amazon, and that some of that inventory could go into Amazon’s e-store, said John B. Kavita, president of BMO Capital Markets in New York.
Walmart also has been selling its home security systems, and its other products, to Home Depot Inc., which is owned by American Express Co. The Home Depot deal, which is expected in the third quarter, is not expected to change the stock price of Walmames home security system business, analysts said.
In February, the company also said it would buy a subsidiary of China-based Huawei Technologies Group Co., the countrys largest telecommunications company.
Huawei has said it will invest in the Uyghur and Central Asian markets to expand its global reach.
The purchase of Walmar’s home security company is part of Walmart’s push to make the Uphold Intercom app, which can be used by customers to remotely access information about their home, more widely available, according.
The home security apps, which are being used in about half of Walmer’s 1,200 stores, are available on iOS and Android.
The new deal with Huawei, which Walmart says it will sell to Amazon in 2021, is another step toward expanding its business into the Chinese market.
That includes purchasing the Home Depot Intercom unit in February, which would be Walmamass home security software.
The integration of the HomeDepot-branded products with the Amazon home security app is also expected to boost the companys sales, analysts have said.