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South African tribunal okays Walmart deal

06-01-2011 09:34 BJT

JOHANNESBURG, May 31 (Xinhua) -- In a much-awaited announcement signaling South Africa's attitude to foreign investment, the country's Competition Tribunal on Tuesday approved U.S. retail giant Walmart's 16 5 billion rand ( 2.4 billion U.S. dollar ) bid for a 51 percent stake in South African retailer Massmart.

Crucially, according to Business Day newspaper in Johannesburg, the tribunal ruling does not require the merged entity to commit to South African local levels of procurement.

The South African Press Association (SAPA) said details were not given but full reasons for the tribunal's decision will be made public within 20 working days.

Business Day said the decision paves the way for the deal to go ahead, subject to any appeal intervening parties such as South African unions or the South African government may make. Both these parties had argued for local procurement conditions to be imposed.

Massmart shareholders in South African approved the deal overwhelmingly in January.

The tribunal accepted the offer which Walmart and Massmart made to create a 100 million rand (14.5 million U.S. dollars) fund to develop local suppliers capable of selling to the merged entity.

"Approval given, with conditions as proposed by merging parties. Customers come first, in Massmart, Walmart and in the Competition Tribunal!" Massmart chief executive Grant Pattison said in text message after the announcement.

The ruling said the merged companies cannot retrench any staff- -"based on the merged entity's operational requirements in South Africa" -- for two years.

In addition they must honor existing agreements with South African unions.

The merged entity must give priority to 503 workers retrenched last year "when employment opportunities become available", the tribunal said.

 

Editor:Yang Jie |Source: Xinhua

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