Antitrust Body's Review Of Wal-Mart's Massmart Buy Extended
January 21 2011 - 11:55AM
Dow Jones News
South Africa's antitrust watchdog Friday extended its review of
the proposed $2.4 billion takeover of local retailer Massmart
Holdings Ltd. (MSM.JO) by Wal-Mart Stores Inc. (WMT) by 15
days.
The move was in response to an application to the Competition
Commission for additional time to submit evidence from labor unions
opposed to the deal. Massmart said it and Wal-Mart opposed the
application, arguing that unions would have an opportunity to
present evidence during public hearings to be held by the
Competition Tribunal.
"Massmart understands that it is important for all stakeholders
to be afforded sufficient opportunity to present their concerns in
good faith," said Grant Pattison, chief executive of Massmart. "We
therefore respect the Competition Tribunal's subsequent decision to
grant a 15-day extension in order to accommodate the union."
Massmart's shareholders last week voted in favor of the
Bentonville, Ark.-based retail giant's offer to buy a 51% stake at
148 rand ($20.93) a share. Pattison at the time said he expected
the Competition Commission to make its recommendations on the
tie-up this month.
The South African Commercial, Catering and Allied Workers Union
in a statement welcomed the decision. "We believe this decision is
significant and sends a clear signal to business that they should
not assume, as Mr. Grant Pattison did, that the Commission is there
to serve the interests of business only," it said.
The union said the commission should consider the possible
affect on the retail and wholesale industry, as well as on the
local supply base, of a deal between the two companies. It has
accused Wal-Mart of being antiunion.
Wal-Mart has repeatedly said it would honor all existing
agreements with unions and local labor laws if the deal goes ahead.
The agreement proposes that Massmart remain listed in Johannesburg,
and both companies have said the existing management team will stay
in place.
Massmart operates several wholesale and retail chains, including
Game general-merchandise stores, Builders Warehouse for
construction and Makro warehouse-club stores. The bulk of the
company's 288 stores are in South Africa, although it also operates
in 13 other sub-Saharan countries.
-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848;
robb.stewart@dowjones.com