The family of Wal-Mart Stores (WMT) founder Sam Walton is planning to pare its stake in the world’s largest retailer by giving billions of dollars worth of shares to a charitable trust that will sell them over time.
The plan follows share repurchases by Wal-Mart in recent years have lifted the Waltons’ ownership to about 50%, a threshold the company does not want to exceed.
Walton Enterprises, the holding company owned by America’s richest family, plans to gradually distribute approximately 6% of Wal-Mart’s outstanding shares – or some 193.5 million shares, worth $15.6 billion at current share prices – to a newly formed entity, the Walton Family Holdings Trust.
Wal-Mart plans to continue with its buy back plan in the coming years, up to $10.3 billion. As a result, the Waltons plan to continue to sell their shares to keep their stake close the current level of ownership. The Walton’s trust has no set timetable for selling shares and expects this could take years.
“The family believes that this is consistent with an appropriate balance of family and non-family ownership that supports the goals of all Wal-Mart shareholders and long-term business success,” Wal-Mart said in a statement. The Waltons plan to use the proceeds to fund charitable contributions.
Sam Walton opened the first Wal-Mart store in 1962. The retailer reported revenue of $485.6 billion for the year ended Jan. 31, 2015.