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CHICAGO - Wal-Mart Stores Inc. on Friday said it agreed to sell its McLane grocery distributor business to Warren Buffett's Berkshire Hathaway Inc. for about $1.5 billion, reports Reuters.
The world's biggest retailer said the deal, which it expects to trim earnings for the next two years, would allow it to focus "completely" on its retail business.
The unit, which supplies Wal-Mart's Sam's Club warehouse stores, accounted for $14.9 billion of Wal-Mart's $244.5 billion in sales for the fiscal year ended in January 2003.
The retailer also said McLane sold its Merit Distribution Services Inc. trucking business to Swift Transportation Co. Inc. for about $50 million. Merit provides trucking services to Wal-Mart's grocery distribution centers and other companies.
Wal-Mart said it expects total proceeds of about $1.5 billion from the two transactions.
Bentonville, Ark.-based Wal-Mart bought McLane in 1990. Its management team will remain in place, and its headquarters will stay in Temple, Texas.
Wal-Mart said the McLane deal would reduce earnings by about 1 cent per share in the current year, and 2 cents per share next year, excluding a one-time gain.
Berkshire Hathaway's holdings range from Dairy Queen ice cream restaurants to Geico insurance. The company said it sees "an excellent possibility" for expanding McLane's customer base.