The South African government has set up a panel to investigate the economic impact of Wal-Mart’s possible takeover of Massmart.
Wal-Mart announced that it had made an offer to buy South Africa-based retailer Massmart Holdings in September. However, a month later, the retailer said it might scale back its bid to “in excess of 50%” to keep the South African retailer listed on the Johannesburg Stock Exchange.
Yesterday (15 November), the Economic Development Minister, Ebrahim Patel said it has now set up a panel to investigate the economic impact of the bid.
Johannesburg-based Massmart is one of the largest distributors of consumer goods on the African continent and is the leading African retailer of general merchandise, operating 290 outlets across 13 countries in Africa, with the majority of its stores based in South Africa.
Having met with the CEO of Massmart and the executive vice president of Wal-Mart last month, Patel said the panel would look at how the proposed merger would affect jobs, labour relations and food security in the country.
“Following the dialogue with Walmart and Massmart, I have set up a advisory panel to identify the relevant policy issues and implications of the proposed acquisition, particularly from an economic development perspective,” Patel said.
“The Economic Development Department (EDD) will also meet key stakeholders, including retailers, manufacturers and trade unions representatives,” he added.
The panel members include; Goolam Ballim (Standard Bank Group Economist), Geoffrey Qhena (CEO of the Industrial Development Corporation), Dr Iraj Abedian (Pan-African Investment and Research Sevices), Duma Gqubule (Kio Advisory Services), Neva Makgetla (Deputy Director General, Economic Development Department) and Malose Kekana (Khula Enterprise Finance).
Patel said it will hold further discussions with the two companies “as these processes unfold”.
In addition, the two companies are expected to go through the necessary regulatory processes.