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Crucial Walmart verdict out soon

Feb 29 2012 10:32 Sapa

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 158
Change 2
% Change 1
Cumulative volume 283137
Market cap 0

Last Updated: 24-04-2015 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - The Competition Appeal Court will release its judgment next Friday on the review of the Walmart-Massmart merger.

"The judgment is important because it will set a precedent for how the South African competition authorities are to balance the competition effects of a merger with public interest considerations," law firm Webber Wentzel said on Wednesday.

Judge Dennis Davis will hand down judgment in Cape Town.

During the hearing in October, Davis said the court had the option of refusing the appeal, changing the conditions attached to the Competition Tribunal's approval, or agreeing to a review of the proceedings.

This would involve a new hearing by the tribunal.

The world's largest retailer, Walmart paid R16.5bn for a 51% stake in Massmart Holdings [JSE:MSM], South Africa's biggest food and general goods wholesaler, in June last year.

This was after the Competition Tribunal approved the deal, subject to certain voluntary conditions.

These included the setting up of a R100m fund to assist local suppliers and agreeing that no jobs would be cut for two years.

However, the departments of economic development, trade and industry, and agriculture, forestry, and fisheries objected, and appealed to the Competition Appeal Court.

They want the merger sent back to the tribunal for reassessment.

The government argued that the tribunal should have looked at whether the merger benefited local suppliers and job creation.

It said the conditions were inadequate and would result in a massive influx of imports that would undermine manufacturing output.

The SA Commercial, Catering, and Allied Workers' Union (Saccawu) filed a separate appeal against the approval of the takeover, on the grounds that the tribunal had failed to take adequate consideration of the public interest.

Saccawu was also concerned that Walmart had an "anti-union philosophy" which would minimise rather than advance jobs.

The union wanted structural remedies put in place to protect workers, and for the supplier development fund to be increased to at least R500m.

 
walmart  |  massmart holdings

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