South Africa’s Competition Commission has said that Wal-Mart’s proposed acquisition of a majority stake in local grocer Massmart Holdings does not raise any competition concerns.
In November, Wal-Mart unveiled a US$2.3bn offer to acquire 51% of the South African retailer.
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In a statement released today (14 February) the competition watchdog said that the deal would not reduce competition in the market. However, it did note that the US retailer’s intended takeover has raised a number of “public interest concerns”.
“These concerns have been voiced by various labour unions and other interested parties and relate to Wal-Mart’s record on labour relations and the local sourcing of products,” a spokesperson for the competition watchdog told just-food.
The Commission has passed its findings along to the Competition Tribunal, which will reach a final decision on whether to approve the deal. Wal-Mart and Massmart have said that they will honour pre-existing union agreements, abide by South African law and source “the majority” of products locally, the Competition Commission confirmed.
“The companies have given a number of reassurances on these points…. It will be for the Tribunal to decide whether they meet the requirements of the Competition Act.”
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By GlobalDataCommenting on the news, Massmart CEO Grant Pattison said that it was “difficult to predict” the timing of the Tribunal ruling and added that Massmart was engaged in “ongoing discussions” with the South African Commercial Catering and Allied Workers’ Union (SACCAWU) as part of its effort to respond to concerns raised by the transaction.
“We are delighted that the Commission has recognised the inherent benefits in this proposed transaction for South African consumers, suppliers, associates/employees and all other stakeholders,” Walmart International CEO Doug McMillon commented.
“We now look forward to constructive participation within the Tribunal process to enable a final decision to be made,” he added.
