Wal-Mart to takeover Massmart
CAPE TOWN - Agence France-Presse
The world’s biggest retailer Wal-Mart will now have a foothold in Africa.A South African court approved Wal-Mart’s $2.2 billion takeover of local chain Massmart, giving the world’s biggest retailer its first foothold in Africa.
The case is seen as a bellwether for foreign investment in South Africa, which is trying to attract major injections of cash into everything from railways to power plants.
Three government ministers had asked the Competition Appeal Court to review the terms of Wal-Mart’s 16.5 billion rand (1.7-million euro) purchase of a 51-percent stake in Massmart.
The court rejected the appeal and signed off on the deal, but imposed some new conditions. It also ordered a study within three months on how small businesses could benefit by selling local products into Wal-Mart’s global supply chain.
The government welcomed the ruling and denied that their challenge would scare off would-be investors in Africa’s largest economy, saying the state had to ensure local benefit from the entry of the game-changing global giant.
South Africa’s powerful trade unions have sharply criticised the deal, saying Wal-Mart’s entry would hurt local manufacturers by increasing imports.