Approval for Wal-Mart deal
By Donna Bryson |
January 19, 2011, Wednesday
|
Print Edition
Print Edition
A SOUTH African retail chain's shareholders have overwhelmingly accepted Wal-Mart's offer to buy 51 percent of their company, the chief executive said, paving the way for the giant US-based retailer to enter Africa.
Massmart said the proposal was approved by 97 percent of shareholders who voted on Monday - 75 percent had been needed. Wal-Mart offered 148 rand (US$20) per share in a 17 billion rand (US$2 billion) deal.
The deal will have to be approved by South Africa's anti-monopoly regulators.
Massmart CEO Grant Pattison said once the deal goes through, Massmart will continue to operate the stores and continue to be listed on the Johannesburg Stock Exchange, while Wal-Mart will be the main owner. Massmart runs about 290 superstores, pharmacy, electronics and other stores in 14 African countries.
"They are a great retailer and we really are looking forward to learning something from them, and teaching them something about Africa," Pattison said. "We're excited because they're coming as our partners."
Wal-Mart has 8,692 stores in 15 countries including Brazil, China and India. But it has not until now ventured into Africa.
South Africa has the most developed economy on a continent slowly emerging from grinding poverty, and one that fared better than other parts of the world during the global recession. Consulting firm McKinsey & Company has concluded that global business cannot afford to ignore Africa's potential. The World Bank has said the continent is finally seeing the results of years of market reforms and investment in education and health care.
South African labor groups say Wal-Mart is anti-union, but the firm has said it is committed to working with South African unions.
Massmart said the proposal was approved by 97 percent of shareholders who voted on Monday - 75 percent had been needed. Wal-Mart offered 148 rand (US$20) per share in a 17 billion rand (US$2 billion) deal.
The deal will have to be approved by South Africa's anti-monopoly regulators.
Massmart CEO Grant Pattison said once the deal goes through, Massmart will continue to operate the stores and continue to be listed on the Johannesburg Stock Exchange, while Wal-Mart will be the main owner. Massmart runs about 290 superstores, pharmacy, electronics and other stores in 14 African countries.
"They are a great retailer and we really are looking forward to learning something from them, and teaching them something about Africa," Pattison said. "We're excited because they're coming as our partners."
Wal-Mart has 8,692 stores in 15 countries including Brazil, China and India. But it has not until now ventured into Africa.
South Africa has the most developed economy on a continent slowly emerging from grinding poverty, and one that fared better than other parts of the world during the global recession. Consulting firm McKinsey & Company has concluded that global business cannot afford to ignore Africa's potential. The World Bank has said the continent is finally seeing the results of years of market reforms and investment in education and health care.
South African labor groups say Wal-Mart is anti-union, but the firm has said it is committed to working with South African unions.
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