Johannesburg - The Competition Tribunal approved
Walmart's R16.5bn ($2.4bn) bid for Massmart Holdings [JSE:MSM] on Tuesday, saying the
retailer must not fire workers for two years.
The conditions imposed on the deal - including a programme
for developing local suppliers - will
likely be seen as a win for the world’s largest retailer, which said it would
walk away from the deal if targets were put on local procurement.
"Today the Competition Tribunal approved the merger
between Walmart and Massmart subject to certain conditions," it said in a
Full reasons for the tribunal's decision will be made public
within 20 working days.
In January, shareholders voted to accept Walmart's bid to
acquire 51% of Massmart for R148 a share. The Massmart group includes Game,
Dion Wired, Makro, Builders Warehouse and Masscash.
Walmart operates around the world, including Canada, Brazil,
China, Chile, Japan and Mexico. It wants to buy the stake in Massmart to obtain a
stake in emerging African markets.
The deal was seen as a test case for major foreign
investment in South Africa. Home to the continent’s deepest capital markets,
South Africa is also a country where unions hold enormous political influence.
Three government departments and the unions had lined up
against the deal, asking the tribunal to impose targets on local procurement
and a freeze on job cuts.
The government and unions are concerned about Walmart's
global supply network which, they say, could lead to a flood of cheap imports,
sparking job losses and squeezing local suppliers.
Massmart shares were up 1.7% at R142.50 immediately
following the announcement.