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| Africa Subsaharan |
| South Africa approves Wal-Mart deal |
| 2011-06-02 |
| [Al Jazeera] South Africa has cleared the way for Wal-Mart to gain its first foothold in Africa, approving the company's $2.4bn bid for control of retailer Massmart with minimal conditions. South Africa's competition tribunal on Tuesday gave Wal-Mart the go-ahead to buy a 51 per cent stake in Massmart provided the US retailer does not lay off any workers for two years. The condition is designed to placate organised labour, which has accused the world's largest retailer of union-bashing. "We have decided to approve the merger subject to the undertakings made by the parties becoming conditions for the approval," the tribunal said in a statement. "The merged entity must ensure that there are no retrenchments, based on the merged entity's operational requirements in South Africa, resulting from the merger, for a period of two years." Wal-Mart in January signed a $2.5 bn offer for a controlling stake in Massmart, which runs nine wholesale and retail chains with 288 stores in 14 African countries. 'Mother of all boycotts' But the deal has been slammed by South Africa's politically powerful unions. The country's largest labour federation, Cosatu, initially threatened "the mother of all boycotts" if the merger went through. The tribunal has ordered Wal-Mart to honour all existing labour agreements and not challenge the position of the country's largest retail-sector labour union, the South Africa Commercial, Catering and Allied Workers Union. But Mike Abrahams, a front man for SACCAWU, told the Rooters news agency that the union might consider appealing to the Competition Appeals Court. "We are meeting with our legal representatives to explore legal possibilities," he said. The deal will for the first time give Arkansas-based Wal-Mart a foothold in Africa and increase its market share in emerging countries, which have been driving its profits as US retail sales have slowed. The company believes South Africa is a key market for growth, accounting for some 20 per cent of consumer spending on the African continent. The tribunal acknowledged the merger was likely to have losers, as Wal-Mart's entry might displace small businesses and reduce the market share of some of the country's major retailers. "That is an inevitable consequence of the competitive process," it said. |
| Posted by:Fred |
| #1 Obviously the checks cleared. |
| Posted by: Besoeker 2011-06-02 01:04 |