WalMart announced on Monday that the company had completed its investment for a 51% stake in Massmart Holdings (MSM) for R148 per Massmart ordinary share.
In what was the most eagerly anticipated decision in South African retail history, the Competition Tribunal gave the nod on the R16.5-billion mega-deal, adding a few conditions for good measure.
The antitrust authority said the companies must uphold existing labour agreements for three years, ensure that no jobs are cut for two years and added that it accepted the condition proposed by the merging companies to set up a R100-million supplier development fund.
Notably, the tribunal shied away from local procurement targets. Government and labour unions were concerned that the acquisition would lead to job losses and hurt local procurement.
“With the closing of our investment in Massmart, we are very excited about our entry into SA as well as the broader African continent. As we do in all of our other markets, we will work to serve underserved customers, to help people save money to live better.
“Just as important, we will grow in this part of the world, and as we do, we expect to create many jobs and support local suppliers. We have a global track record of working directly with small farmers, boosting their income and helping them become more sustainable, and we look forward to bringing those practices to SA,” said Doug McMillon, president and CE of WalMart International.
Massmart will continue to trade on the Johannesburg Stock Exchange to provide Massmart shareholders with the ability to participate in the growth opportunity of the combined entity.
WalMart has asked Massmart chairperson Mark Lamberti to remain as chairperson, while the board will be further strengthened by WalMart executives, including McMillon, Jeff Davis, senior vice-president of finance and treasury, and JP Suarez, senior vice-president for international business development.
McMillon said the group was committed to partnering with government and key stakeholders.
The Massmart group includes Game, Dion Wired, Makro, Builders Warehouse and Masscash. — I-Net Bridge