S.Africa appeals Wal-Mart takeover

21st July 2011, Comments 0 comments

Three South African government ministries have appealed Wal-Mart's $2.4-billion takeover of the Massmart group, which was approved in May by the competition authority, court papers showed Thursday.

The 68-page objection wants the Competition Appeal Court to "review and set aside the merger approval" which gave the world's largest retailer its first foothold in Africa.

The ministries of trade, economic development and agriculture filed the appeal on the $2.4 billion (1.7 billion euro) takeover, which was finalised on June 20.

They argued that the tribunal's approval of the merger and its conditions were unreasonable and that the tribunal failed to allow a full airing of concerns about the deal.

Government and unions had wanted the competition tribunal to require Wal-Mart to purchase a portion of its goods locally, fearing a flood of cheap imports would result in job losses at local manufacturers.

Wal-Mart was given the go-ahead to buy a 51 percent stake in Massmart, provided the US retailer does not lay off any workers for two years.

Massmart runs nine wholesale and retail chains with 288 stores in 14 African countries.

The appeal is the second against the deal following an objection filed in June by the South Africa Commercial, Catering and Allied Workers Union.

© 2011 AFP

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