Wal-Mart announced today (27 September) that it has made an offer to buy South Africa-based retailer Massmart Holdings.
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.
It has made an offer for ZAR148 (US$21.1) a share and is an indicative, non-binding offer and is subject to a number of conditions, including due diligence, and a period of reciprocal exclusivity granted by Massmart and Wal-Mart. In accordance with the South African legal requirements, Massmart today filed a Cautionary Announcement indicating the terms of the Contemplated Offer.
Andy Bond, executive vice president with responsibility for Wal-Mart’s operations in the region, including the UK and Africa, said: “South Africa presents a compelling growth opportunity for Wal-Mart and offers a platform for growth and expansion in other African countries. South Africa possesses attractive market dynamics, favourable demographic trends and a growing economy.”
Commenting on Wal-Mart’s offer, Massmart said it is at the beginning of the process and it is “difficult to say how long it will take or whether it will lead to an offer”.
Massmart CEO Grant Pattison said: “Wal-Mart’s interest represents a vote of confidence in South Africa as well as in Massmart and all its employees.”
Shares in the South African company company surged 10.72% on the announcement at 11:06 SAST.