South Africa's government is assessing the conditions placed on Wal-Mart Stores Inc.'s (WMT) proposed $2.4 billion merger with South African retailer Massmart Holdings Ltd. (MSM.JO) to see if they are adequate to meet public interest concerns.

South Africa's Competition Tribunal approved the merger subject to Wal-Mart and Massmart agreeing to make no job cuts for the first two years following the merger, to respect union bargaining agreements for three years, to give preferential hiring to the 503 workers laid off in 2010 before the merger was announced, and to establishing a 100 million rand ($14.7 million) fund to help train local suppliers to be more competitive globally.

"We will study whether the specific measures set out in the conditions adequately meet the public interest tests set out in the Competition Act and whether they will secure the desired outcome, in particular ensuring that South Africa is not faced with large-scale job losses in supplier industries to Massmart/Wal-Mart," said a joint statement from the Economic Development Department, Department of Trade and Industry and the Department of Agriculture, Forestry and Fisheries.

The tribunal's decision follows a week-long hearing in early May, when both the government departments and unions voiced concerns that Wal-Mart's supply chain history of using cheap imports would squeeze out local suppliers, cause business closures and lead to job losses.

"We welcome the recognition by the Competition Tribunal that a merger as contemplated should be subject to conditions," the statement said.

"Based on the outcome of the study of the conditions and the responses of Wal-Mart/Massmart, we will decide on the next steps to take. Government reserves its legal options at this stage."

-By Devon Maylie, Dow Jones Newswires; +27 (11) 783 7848; devon.maylie@dowjones.com