Business
South Africa: Walmart takeover of Massmart approved by court
A South African court approved on Friday Walmart‘s US$2.2 billion takeover of local chain Massmart, giving the world’s biggest retailer its first foothold in Africa.
The case is seen as a bellwether for foreign investment in South Africa, which is trying to attract major injections of cash into everything from railways to power plants.
Three government ministers had asked the Competition Appeal Court to review the terms of Walmart’s 16.5 billion rand (US$ 2.2 billion) purchase of a 51 percent stake in Massmart.
The court rejected the appeal and signed off on the deal, but imposed some new conditions. It also ordered a study within three months on how small businesses could benefit by selling local products into Walmart’s global supply chain.
The government welcomed the ruling and denied that their challenge would scare off would-be investors in Africa’s largest economy, saying the state had to ensure local benefit from the entry of the game-changing global giant.
“One of the red herrings that has been thrown around about this particular process has been about whether this is a generalized statement on foreign direct investment,” said Trade and Industry Minister Rob Davies.
“It’s not correct and misleading to make those big leaps, to say, we are negative about foreign investment. Not at all.”
