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29 Nov 2010 15:03
Wal-Mart plans to buy a controlling stake in South African wholesaler Massmart for more than $2-billion after scaling back its offer for the company’s entire stock, Massmart said on Monday.
“The total transaction is valued at approximately R17-billion for 51% of Massmart,” the company said in a statement.
In September, the world’s largest retailer launched an offer for Massmart, but the company later announced that it was to reduce its bid, following talks between the firms.
“If approved, the transaction promises to be very positive for the regional economy, facilitating job creation, providing new opportunities for small and medium businesses and improving competitiveness,” said Massmart chief executive Grant Pattison.
Wal-Mart initially offered $4,2-billion.
The company said the transaction was subject to a number of conditions, including the two-thirds majority shareholder support and approval from the South African antitrust authorities.
Massmart is the country’s biggest wholesaler and operates 288 stores in 14 countries around Africa.
According to Massmart, the majority offer would ensure that the company remains listed on the JSE, enabling shareholders to continue to participate in future growth.
Wal-Mart’s offer angered labour unions, with the Congress of South African Trade Unions calling the company one of the worst union-bashing employers in the world.
The union also feared that the giant retailer, which is known for cheap prices, would undermine local firms.
The Bentonville, Arkansas-based company reported a record net profit of $3,32-billion in the first quarter of 2010, pushed by strong sales in China, Brazil and Mexico.—AFP
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