Ruling on Walmart deal due soon

Ruling on Walmart deal due soon

RETAILER NEWS

Business Day - Nov 28th 2011, 08:47

Competition Appeal Court Judge President Dennis Davis has said he hopes to announce a decision on Walmart’s purchase of a controlling stake in Massmart by the end of next month. 

"I hope to get it out by the end of December," Judge Davis said on Friday. "I can give you a guarantee that it will be out by the end of January."

On May 31, the Competition Tribunal authorised Walmart to buy a 51% holding in Massmart, SA’s biggest general goods wholesaler. Approval was subject to the companies promising to refrain from firing workers for two years and set up a fund to assist local suppliers and manufacturers.

The South African Commercial, Catering and Allied Workers Union, fearing job losses, has asked the Competition Appeal Court to overturn the antitrust tribunal’s clearance of the purchase, saying the regulator’s hearings were procedurally flawed and its ruling failed to take account of the deal’s potentially negative effect on the economy.

The court may decide to refer the decision back to the tribunal, uphold the approval of the takeover, or rule it should have been rejected or subjected to different conditions, Judge Davis said during the October 20-21 court hearing.

Walmart, the world’s largest retailer, paid R16,5bn in June for the stake in Massmart. The company said it would create 15000 jobs in SA within five years and spend about $60bn on food or fast-moving consumer goods in the period, most of which would go to local suppliers.

Massmart’s shares gained 0,78% on Friday, to close at R155.