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August 2011 | Angeline Albert
competition authority is challenging Wal-Mart’s plans to take a 51 per cent
share in the South African retailer Massmart.
to the Massmart’s latest financial results, the Competition Commission of
Namibia had appealed against the decision of the country’s High Court to allow
the takeover deal, having also previously contested a similar ruling in favour
of the acquisition by Namibia’s competition tribunal. A final decision will now
be made by the Supreme Court of Namibia on 17 October.
US retailer’s bid for a majority stake in Massmart was approved by South Africa's Competition Tribunal in June,
but the South African government and the Congressof South African Trade Unions (Cosatu) are also appealing
on the grounds that local suppliers would lose business to foreign producers.
of South Africa’s government departments - the Department of Trade and
Industry, the Department of Economic Development, the Department of Agriculture
- Cosatu have filed a review and an appeal respectively. This appeal is
scheduled to be heard in South Africa on 20 and 21 October.
Massmart has 315 stores in 13 countries in Africa. This includes 188 stores in
South Africa, three in Namibia, nine in Botswana, two in Lesotho and one in
establishment of a supplier development fund made available by Wal-Mart and
Massmart was one of four voluntary conditions agreed to during South Africa’s
competition tribunal hearing. The tribunal ruled the deal could go ahead if the
company spends R100 million (US$14.1 million) sourcing local products over the
next three years. A spokesman for Massmart told SM the specifics of the development fund had yet to be worked out.
1 September, Mcane Mthunzi, the CEO of the Consumer Goods Council of South
Africa, will start a new role as Massmart’s supplier development executive this
week. He will be responsible for managing the supplier development fund and
working with local manufacturers and farmers.
a conference scheduled for next week, Mthunzi will meet with around 2,000
potential suppliers to discuss how they can benefit from the fund to grow their
business globally through Wal-Mart. Grant Pattison, Massmart CEO, said that
despite the appeals, “the process of integration” with Wal-Mart had begun.