It may have taken longer than originally thought, but competition authorities in South Africa cleared the way for Walmart to move forward with its acquisition of Massmart, the company announced Tuesday.
The nation’s Competition Tribunal did impose some stipulations on the company however, as Walmart’s reputation preceded it, and opponents of the merger used some negative perceptions of the company to extract concessions. For example, Walmart is required to establish a supplier development fund and commit to making no merger-related retrenchments for a period of two years while continuing to recognize the workers’ union that represents store employees for three years after the acquisition.
“We’re pleased that the competition authorities have recognized the benefits that our investment in Massmart can deliver,” said Walmart International president and CEO Doug McMillon. “We look forward to creating new jobs in South Africa, support for the development of South African exports, and providing previously underserved customers and communities with better prices and increased access to the products they want and need. All of this is consistent with the benefits we’ve delivered to markets around the world.”
According to Walmart, it is planning significant new store openings in Africa that will create thousands of new union jobs and drive a 50% growth rate in the Massmart food business over a five year period. Specifically in terms of fresh food growth, Walmart and Massmart have committed to ensure that the vast majority of those products will be sourced from South Africa.
“The Massmart management team welcomes the prospect of becoming part of the Walmart family and we will now advance our strategy to ensure that our financial base is geared to accelerate growth through the opening of additional locations, which will provide more jobs and also career opportunities for our existing team, while bringing more outstanding products with lower prices to our customers,” said Massmart CEO Grant Pattison.