Wal-Mart wins Massmart shareholders' vote, union threatens boycott
18 Jan 2011
Shareholders' of Massmart, South Africa's biggest food and general goods wholesaler, today voted in favour of Wal-Mart acquiring a majority stake of Massmart – a move that has led to local powerful unions threatening a boycott.
Nearly 79 per cent of Massmart shareholders approved Wal-Mart acquiring a 51-per cent stake for $2.3 billion despite the Congress of South African Trade Unions (Cosatu) had urged shareholders to vote against the deal.
Wal-Mart, the world's largest retailer, had in September made a $4.2-billion (29.8 billion rand) takeover offer for South Africa's s biggest food and general goods wholesaler Massmart. (See: Wal-Mart launches $4.2 billion takeover bid for South Africa's Massmart)
But Wal-Mart scaled down its bid a month later from acquiring the whole of Massmart to only 51 per cent after major shareholders of Massmart, a majority of whom are non-South Africans, indicated that they would prefer to keep a stake in the company and take part in Massmart's future growth in Africa.
Analysts had said that the South African government also may have played a role in Wal-Mart abandoning its bid for a total takeover of Massmart since the US retailer comes with a reputation of killing local competition.
Historically, South Africa has always opposed overseas firms from buying out large strategic companies unless the target company is in financial trouble.
