In Monday’s closing arguments before the Competition Tribunal, merging parties Massmart (MSM) and Walmart maintained that no conditions were necessary regarding their R16,5-billion deal.
To demonstrate goodwill, the companies made commitments to the various stakeholders in the transaction and indicated to the tribunal that it may impose these commitments as conditions on the merger.
Among the commitments, Walmart and Massmart proposed to establish a R100-million supplier development fund if the proposed merger between the two companies is approved by the Competition Tribunal.
“We continue to believe the proposed merger will increase competition and benefit the stakeholders related to this transaction. In an effort to increase the comfort of those involved, we feel that these proposed commitments demonstrate our good faith and will allow us to collectively serve customers in South Africa and help them save money and live a better life,” Walmart International chief executive Doug McMillon said.
The supplier programme will be funded in a fixed amount of R100-million to be contributed by the merged entity and expended within three years from the effective date of the proposed transaction and will be administered by the merged entity, advised by a committee established by it and on which representatives of the unions, business and the government will be invited to serve, reporting back to the Competition Commission annually about its progress.
The companies said they would also establish a programme to train local South African suppliers on how to do business with the merged entity and with Walmart globally.
“We anticipate that Walmart will enable Massmart to accelerate the implementation of our new fresh food offering which will require a network of reliable local suppliers; we are therefore likely to place priority on the development of local farmers. In this way the merger will assist in delivering the dual benefits of increasing competition amongst national food retailers whilst also growing the local producer base,” Massmart chief executive Grant Pattison said.
The companies also proposed a commitment to ensure that there were no retrenchments, based on its operational requirements in South Africa, resulting from the merger for a period of two years from the effective date of the proposed transaction.
Massmart and Walmart also proposed to guarantee continued recognition of the South African Commercial Catering and Allied Workers Union (Saccawu). — I-Net Bridge