United States retailer Walmart’s acquisition of a controlling share in Massmart has attracted more attention than expected, Massmart CEO Grant Pattison said on Thursday.
The deal “has attracted more attention than I thought it would have”, he said on the release of half-year results to December 2010 in Johannesburg.
The Competition Commission has recommended that the transaction go through with no conditions. The Competition Tribunal now has to make its decision and its hearings will begin on March 22.
Following the hearing, it has 10 days to announce its finding.
Pattison said they had held workshops countrywide with around 2 000 suppliers to discuss their concerns.
This “saw their anxiety levels drop”, he said.
Suppliers had been concerned about the slashing of their prices to compete with cheap imports, among others.
Anti-union
They were also holding regular discussions with the South African Commercial Catering and Allied Workers’ Union (Saccawu) which was very concerned about the deal leading to job losses and deterioration in working conditions.
Walmart is known to be anti-union.
Saccawu, which represents about 40% of Massmart employees, and other bodies had formed the Anti-Walmart Coalition to lobby against the deal which it believes would have negative consequences for Massmart workers, the wholesale and retail sector and its supply chains.
“We are trying to manage their natural anxiety about employment.”
Pattison said it was not Massmart’s intention to change anything relating to employment. No job losses were planned, employment conditions would remain the same and they would retain the unions.
Massmart was also trying to deal with fears about the protection of workers in other industries and competitors who might be affected by the transaction.
“It is difficult to participate in this conversation … we are trying to tell them everything we know.
“We are trying to alleviate their fears which are probably a bit overcooked.”
It’s about intellectual property
Saccawu has made various threats about its plans should the deal go through.
“It is difficult to tell how much is rhetoric and how much is real, but I guess we’ll know in a few months time,” said Pattison.
The company is starting to plan for what will happen should the transaction be approved.
“We are beginning to think about what we’ll do on the day it goes live,” he said, explaining that the focus would be on integration.
They would also be looking at what they can learn from Walmart and apply to their business, while Walmart would be learning from them.
“It’s mainly about intellectual property.”
In January, shareholders voted to accept Walmart’s bid to acquire 51% of Massmart for R148 a share in a deal worth around R17-billion. — Sapa