Forum lodges concerns over possible Wal-Mart deal

2010-11-23 13:12

The SA Small and Medium Enterprises (SMME) Forum today lodged documents

with the Competition Commission, detailing concerns on the proposed

merger between US giant multinational retailer Wal-Mart and South

Africa’s Massmart.

In its submission, the forum raised concerns that some of the current members’ supply agreements with Massmart may be prejudiced as a result of the proposed merger, said Tebogo Khaas, president of the forum, which represents small and medium enterprises.

“The forum, inter alia, also raised the negative effect the Wal-Mart-China trade has had on US jobs and small business development since 2001.”

The forum has also instructed its attorneys, Deneys Reitz, to canvass its views during the Commission’s investigation process, he said.

“The forum has requested that it be further consulted by the Commission in the proposed merger proceedings.”

Wal-Mart offered to buy Massmart in September for $4.25 billion (about R29.7 billion), it was reported.

In October, Massmart said Wal-Mart may reduce its bid.

In a statement to the Johannesburg Stock Exchange (JSE) on which it is listed, Massmart said it was notified by Wal-Mart that it was investigating potential options for and the merits of retaining Massmart’s listing on the JSE.

This, after Wal-Mart consulted with major Massmart shareholders and key SA stakeholders.

“These investigations could lead to Wal-mart making a partial offer to acquire in excess of 50 percent of the entire issued share capital of the company for a cash price of R148 per share.”

In the event a firm offer was received from Wal-Mart, the Massmart board would obtain an independent opinion and express a view on the firm offer to shareholders.

In a separate statement, Massmart CEO Grant Pattison said: “Wal-Mart and Massmart have held initial meetings with all major stakeholders and have had constructive engagements with them.”

SA trade unions have also come out against the proposed take-over, alleging that Wal-Mart has a history of “union bashing”.

“Wal-Mart is a known anti-union company, which trains its managers to keep the workplaces union-free,” the Congress of SA Trade Unions (Cosatu) was quoted as saying in September.

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