Wesfarmers Ltd (ASX: WES) seems to be focusing on expanding its resources earnings and capabilities.
Wesfarmers is a 100 year-old conglomerate which at various times has owned and operated some of Australia’s largest retail brands such as Kmart, Target and more. Today, its largest business is Bunnings Warehouse, the number-one DIY home improvement business.
Is Resources Going To Be Wesfarmers’ New Focus?
It wasn’t too long ago that Wesfarmers sold off coal assets like the sale of its Queensland coal mine, Curragh, to Coronado Coal Group for $700 million.
Wesfarmers is currently quite retail focused with its nationwide chains of Bunnings, Target, Kmart and Officeworks.
However it seems to be looking to expand in the resources sector, which is an interesting move and alters the perception of Wesfarmers. Some investors may also feel that it increase the risk as well.
Wesfarmers tried to acquire Lynas Corporation Ltd (ASX: LYC), but the Lynas share price has jumped significantly since then, so the takeover seems dead in the water.
But Wesfarmers does seem as though it will be successful in acquiring lithium business Kidman Resources Ltd (ASX: KDR).
To suddenly swing to acquiring resources company after its various divestments, including Coles Group Limited (ASX: COL), is an interesting move.
What Has Wesfarmers Done Today?
The old conglomerate announced that it is appointing Ms Sharon Warburton to the Wesfarmers Board.
Wesfarmers said that Ms Warburton has extensive board and executive experience in corporate strategy, business operations, finance and risk management, particularly in the resources and infrastructure sectors.
Ms Warburton is currently a non-executive director and co-deputy chairman of Fortescue Metals Group Limited (ASX: FMG) and she’s also a non-executive director of Gold Road Resources Ltd (ASX: GOR), Nextdc Ltd (ASX: NXT) and Worleyparsons Limited (ASX: WOR).
There is obviously a reason that Wesfarmers wanted her on the board and it seems that the company will continue to evolve its portfolio.
However, with the shift to resources I think would rather own shares of the the reliable business in the free report below over Wesfarmers.
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