Walmart takeover of Massmart approved
Walmart’s 17 billion rand takeover of Massmart has been approved in a South African court ruling.
Regulators have approved the bid to buy a controlling share of the South African supermarket chain despite unions and government officials expressing concern over job losses and fears that local manufacturers will be replaced.
US chain Walmart, the world’s biggest retailer, has been made to follow certain stipulations by the Competition Tribunal – it cannot lay off any workers for two years, must respect existing labour agreements that Massmart have in place for three years and must invest in training South African suppliers.
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The two companies had previously agreed to fulfill these steps regarding layoffs and union agreements. They also said it would spend R100 million during the next three years to help farmers and other local suppliers prepare to do business with Walmart.
The tribunal said that Walmart was likely to bring lower prices and "benefit consumers by strengthening rivalry and improving choice."
Critics argue that Walmart will sell cheap foreign goods and reduced rates, forcing other other retailers to do the same and putting local manufacturers out of business.