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Union readies first Walmart salvo

Oct 01 2010 18:41
Andile Makholwa

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 64
Change 1
% Change 1
Cumulative volume 789604
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Johannesburg – South Africa’s retail union Saccawu confirmed it was preparing submissions to the Competition Commission aimed at blocking the proposed R32bn takeover of Massmart Holdings [JSE:MSM] by US firm Walmart, a deal the union claims is tailored to line executive pockets.
 
Saccawu also accused Massmart of having failed to call a meeting with the union to discuss its concerns, a claim the SA retailer disputes.
 
“We’re in the process of preparing a submission to the Competition Commission and other relevant ministries, and will only be able to do so on the basis of knowing all the facts. It’s in this regard that we expect management to meet with us instead of running to the media,” said Saccawu’s Mike Abrahams.
 
“We believe this is necessary because this deal will not only have implications to Massmart or the wholesale and retail sector, but also to suppliers and manufacturing in the country and the development of our local economy.”  
 
Grant Pattison, CEO of Massmart, said senior leadership of both Saccawu and Cosatu (the trade union federation to which Saccawu affiliates) were contacted by phone on Monday morning to communicate the beginning of discussions with Walmart.
 
“Offers were made to facilitate meetings with both Massmart and Walmart. Follow up calls have been made. We have received no response as of lunch time Friday, October 1,” said Pattison.
 
The JSE and SRP required the company to disclose all material information equally to all parties, he said.
 
“This was done on Monday, September 27. We have made ourselves available to answer any question asked of us, by the Unions or otherwise. We have received no requests from either Saccawu or Cosatu so far.”
 
Saccawu, which represents about 38% of Massmart employees, has vowed to campaign against the proposed deal, saying Walmart is one of “the worst and stubbornly anti-union companies in the world” that should not be welcomed in South  Africa.
 
Saccawu on Tuesday said Walmart has become so powerful that it dictated to their suppliers at what price they were prepared to buy goods. Failure to meet Massmart’s criteria have seen many suppliers, distributors and manufacturers into liquidation.
 
The union feared this “reverse auction” relationship would collapse local manufacturing firms as it has been in other developing countries where Walmart operates.  
 
Abrahams said the lucrative Walmart offer was likely to interest Massmart shareholders because they only think of their pockets rather than broader implications.  
   
“The interest of shareholders in this deal, to us at this point, looks like those of the major shareholders; especially top management which holds millions of shares,” said Abrahams.
 
Pattison said Massmart employees, including management, have been incentivised with participation in share ownership, as approved by shareholders, and have the ability to trade in those shares regardless of an offer from Walmart or not.
 
Abraham said: “At this stage until the nature of the offer become more clear, we will continue to mobilise our membership, the labour movement and international solidarity against Walmatisation of the sector and consequent fall-out of such a move and will assess our actions and strategies on an ongoing basis.”
 
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