US retail giant Wal-Mart today (27 September) said it has made an offer to buy South Africa-based retailer Massmart Holdings, in a deal that could be worth around US$4.2bn and provide a platform for future growth in Africa.
Johannesburg-based Massmart is one of the largest distributors of consumer goods on the African continent, with 290 outlets across 13 countries in Africa. The majority of stores in its eight wholesale and retail chains are based in South Africa and operate under a variety of different brand names, selling home improvement equipment and supplies, food, and general merchandise, which includes apparel.
Wal-Mart’s offer of ZAR148 (US$21.1) a share is subject to a number of conditions, including due diligence, and a period of reciprocal exclusivity granted by Massmart and Wal-Mart.
“South Africa presents a compelling growth opportunity for Wal-Mart and offers a platform for growth and expansion in other African countries,” said Andy Bond, executive vice president with responsibility for Wal-Mart’s operations in the region, including the UK and Africa. “South Africa possesses attractive market dynamics, favourable demographic trends and a growing economy.”
Massmart CEO Grant Pattison added: “Wal-Mart’s interest represents a vote of confidence in South Africa as well as in Massmart and all its employees.”
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