Union pursues Walmart appeal
Fin24 - Jun 28th 2011, 13:07
Johannesburg - The South African Commercial Catering and Allied Workers' Union (Saccawu) has filed an appeal against the already-approved takeover of local retailer Massmart Holdings by US retail giant Walmart.
The union lodged the appeal with the Competition Appeals Court on Monday. It said on Tuesday it would wait for the Competition Tribunal to make public its reasons for approving the R16.5bn deal before explaining what exactly it hoped to achieve from the appeal.
The Tribunal is to reveal its reasons on Wednesday.
In its application, Saccawu said it is appealing “the whole decision and order of the Tribunal, including the approval of the deal and the imposition of conditions”.
Jason van Dijk, of law firm Norton Rose SA said the union could be unhappy at the Tribunal allowing for the re-employment of 503 retrenched employees as and when job vacancies arise at Massmart, instead of insisting on reinstatement.
“Clearly the union is unhappy with some of the Tribunal’s terms of the deal,” said Van Dijk.
Van Dijk, whose law firm has represented the three government departments opposed to the deal, said details of the application would become clearer after the Tribunal publishes its reasons for approving the takeover.
The government has not yet decided whether or not it would appeal, but has the option of joining Saccawu is its action.
In May the Competition Tribunal ruled that the deal could go ahead with conditions proposed by Walmart and Massmart.
The conditions included setting up a R100m supplier development fund, not retrenching employees for the next two years due to changes brought about by the merger, and the continued recognition of Saccawu for three years post the merger.
Massmart holdings include Game, Makro, Dion and Builders Warehouse.
On June 20, Walmart said it had completed its acquisition of a controlling stake in Massmart Holdings and named three new members to its board.
The world's largest retailer said it had completed its investment and that it expected to create "many jobs" and support local suppliers in its newest market.
Shares of Massmart were up 3% on Tuesday afternoon as investors bet the company is going to quickly benefit from its tie up with Walmart.
“People are starting to absorb what’s happening with Walmart and the fact that they started their marketing campaign over the weekend and not wasting time and getting stuck into the African market,” said Byron Lotter,an analyst at fund manager Vestact.
Massmart said on Sunday it aims to create 15 000 jobs in the next five years, it also announced a marketing campaign with lower prices.
Shares of Massmart were trading at R138.08, a 3% advance.
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