(Bloomberg) -- Wal-Mart de México SAB shares gained after the nation’s biggest retailer emerged from an antitrust probe with a fine of less than $5 million, a tiny fraction of its revenue.
Mexico’s competition watchdog found the company engaged in monopolistic practices regarding “contributions from providers,” according to a statement from the company, which said it will challenge the decision. Walmex, as the Mexican unit of Walmart Inc. is known, said that the board of Mexico’s antitrust agency was split on the decision and that it faces a fine of 93.4 million pesos ($4.6 million).
Walmex’s stock rose as much as 7.7% in Mexico City, the most since March 2020, after the ruling from the four-year probe appeared to remove the risk of a more severe penalty.
“The determination takes off the table the more concerning scenarios of mandating divestments or levying large fines,” said Bradesco BBI strategist Rodolfo Ramos. “We continue to hold Walmex in our Mexico strategy portfolio and believe shares could continue to re-rate on the back of this announcement.”
The agency, called Cofece, interviewed suppliers and other retailers as part of the four-year probe to determine whether Walmex engaged in unfair practices in areas such as wholesale supply, distribution and retail operations.
Walmex executives have criticized the process, saying the investigation lacked transparency. In Friday’s statement, the company said it believes “the analysis is incorrect and that Cofece committed errors in the application of the law.”
Last month Mexico’s congress approved a bill to dismantle autonomous government watchdogs, including Cofece and other regulators, which may complicate enforcement of the ruling. Antitrust efforts will now be overseen by a decentralized agency in the Economy Ministry.
Walmex reported revenue of nearly $46 billion last year and employs some 200,000 workers in Mexico, making it one of the country’s biggest employers.
--With assistance from Leda Alvim and Carolina Millan.
(Updates with Walmart shares in the first paragraph)
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