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Walmart finally given go ahead for Massmart deal

The appeal against Walmart’s $2.4 billion acquisition of Massmart has been mostly dismissed by a Cape Town court. The US retail giant’s takeover of the South African company has...

http://www.africanbusinessreview.co.za/finance/1049/Walmart-finally-given-go-ahead-for-Massmart-deal


Walmart finally given go ahead for Massmart deal

- Finance - Mar 09, 2012

The appeal against Walmart’s $2.4 billion acquisition of Massmart has been mostly dismissed by a Cape Town court.

The US retail giant’s takeover of the South African company has been the focus of much debate, with three government departments and unions lodging an appeal for the deal to be re-examined.

South Africa’s competition authorities had cleared the deal, which saw Walmart take a 51 percent in Massmart, in June - however the appeal was launched in July creating a cloud over the agreement.

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The court rejected proposals that Walmart should meet targets on using local suppliers, which the government said would help to protect jobs. It did rule though that 503 Massmart workers axed directly before the acquisition should be reinstated because their firing was "closely linked" to the merger.

Despite Walmart’s pledge to set up a R100 million fund to develop local suppliers, the court said it ordered Massmart, the government and labour union SACCAWU to set up a commission to study how small suppliers can play a part in Walmart's supply chain.

Massmart, which is expected to further expand in Africa, said that it welcomed the decision.

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