Govt doesn't want to block Walmart deal
Fin24 - Jul 25th 2011, 10:44
Johannesburg - Government is not seeking to overturn competition regulators' approval of Walmart buying control of local retailer Massmart Holdings, but wants tougher conditions for the deal, the Business Day newspaper reported on Monday.
Wal-Mart finalised its $2.4bn purchase of 51% of discount retailer Massmart on June 20, after winning approval with minimal conditions from South Africa's Competition Tribunal.
It was reported last week that the government was appealing against the tribunal's decision and wanted the court to either set aside the ruling or send the matter back for further consideration.
But Business Day quoted department of trade and industry director general Lionel October as saying the government wants the antitrust authority to increase potential penalties for the companies if jobs are lost or local products are swamped by a surge in imports.
"The thrust is not blocking the merger any more. We're more looking at the condition they gave," October was quoted as saying.
One option being considered was to change the conditions of the R100m fund to help local suppliers which was part of the deal.
October said if it could be shown that jobs were lost because Walmart was not buying from the local supply chain, then the US retailer would have a duty to improve on the programme.
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