A court in South Africa has dismissed an appeal from the country’s government for Wal-Mart Stores’ acquisition of a controlling stake in local retailer Massmart Holdings to be reviewed.

On Friday (9 March), despite opposition from organised labour and South African government officials, the Competition Appeal Court upheld a ruling handed down last year by the country’s Competition Tribunal that paved the way for Wal-Mart to buy a 51% stake in Massmart.

However, in a concession to concerns over the impact Wal-Mart’s market entry could have on South African producers, the regulatory body did call for a study to examine how to protect local producers from being undercut by cheap imports.

In a bid to quell these fears, Wal-Mart and Massmart had already agreed to spend ZAR100m over three years to help South African suppliers prepare to do business with Wal-Mart.

The appeal court also called for the 503 workers who were made redundant in what unions claimed was a bid from Massmart to make itself more appealing to Wal-Mart to be reinstated.

In a joint statement, Wal-Mart and Massmart welcomed the ruling and said they were “keen to work with interested parties to develop local suppliers and producers”. However, the companies added that they “respectfully disagree” with the court’s findings concerning Massmart’s lay-offs, insisting that they were unrelated to the merger.

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“It is important to emphasise that notwithstanding the differences of opinion that have been expressed during this process, we want to build good relationships and enter into constructive partnerships with government, organized labour and other interested parties,” Massmart CEO Grant Pattison added.

In a joint statement, the government’s ministers of agriculture, economic development and trade, who had challenged the deal, said they welcomed the appeal court’s attempts to take into account the interests of small business.

“This has been at the heart of government’s case during all the legal proceedings in this matter,” the statement said.

Massmart operates nine wholesale and retail chains in South Africa, including Makro supermarkets, Cambridge Food and Jumbo Cash and Carry.