Wal-Mart transaction approved
The Competition Commission has concluded its investigation and has referred Wal-Mart's proposed acquisition of 51% of Massmart's equity to the Competition Tribunal with a recommendation that the transaction be approved without conditions, it was announced Saturday, 12 February 2011. The next step in the approval process is the Competition Tribunal hearing, followed by its ruling on the transaction.
Commenting on the anticipated timing of a ruling by the tribunal, Massmart CEO Grant Pattison said "It is difficult to predict exact timing as this is largely dependent on the availability of suitable dates on the tribunal's roll." He added that the company was engaged in ongoing discussions with SACCAWU as part of its effort to respond to the union's concerns related to the transaction.
Wal-Mart International CEO Doug McMillon commented, "While the remaining conditions to this transaction must be approved and accepted, specifically the deliberation and decision by the Competition Tribunal, we are delighted that the Commission has recognised the inherent benefits in this proposed transaction for South African consumers, suppliers, associates/employees and all other stakeholders. We now look forward to constructive participation within the Tribunal process to enable a final decision to be made."
Share offer
Wal-Mart's offer for 51% of Massmart will ensure that the latter remains listed on the JSE, enabling shareholders to continue to participate in future growth. Subject to the fulfilment or waiver of the conditions precedent, the offer, as it applies to its ordinary shareholders, is to be implemented by way of a scheme between the company and the holders of qualifying ordinary shares. Once the scheme is operative, Massmart ordinary shareholders will be deemed to have disposed of their scheme shares, representing 51% of their total shareholding. They will retain the remaining 49% of their shareholding for as long as they choose to do so. The same dispensation is made to beneficiaries of the trusts.
