The deal is done: Walmart now owns 51 percent of Massmart. The South African retail group that owns Makro, Game and Builders Warehouse will now begin integrating its business with the largest retailer in the world.
Massmart chief executive Grant Pattison said yesterday: “We are moving quickly on three fronts.” The first was to put in place measures to implement the conditions the Competition Tribunal imposed when it approved the deal, which include a R100 million fund to help local suppliers become more competitive.
The deal was opposed by unions and the government wanted conditions to protect jobs and local industry.
The tribunal will publish the reasons for its decision next week and its approval of the deal could be challenged.
Pattison said there were some legal options open to intervening parties, but “we believe we are on fairly strong ground if there is any legal intervention”. He added: “We would encourage engaging as partners.”
Walmart International chief executive Doug McMillon said: “We will grow in this part of the world, and as we do, we expect to create many jobs and support local suppliers.”
Pattison said with the deal done management would also focus on integrating Walmart and Massmart, specifically in terms of governance, procurement processes and sharing best practice.
He added that management was beginning to identify great deals and new products for customers. Initially there would be some price promotions and in-store branding with Walmart, although Massmart’s trading names would remain the same.
But Pattison said benefits for customers would be incremental as it was “a process driven by taking out costs and passing them onto customers”.
An example was taking out the middle man who acted as an import agent and charged a commission.
Massmart has aggressive expansion plans and intends to grow space by 8 percent a year. The impact of Walmart on the rollout of new stores is only expected in about three years.
With the transaction finalised board changes were announced yesterday. Walmart, which in terms of the deal has the right to nominate the chairman, asked current chairman Mark Lamberti to remain in his position.
Lulu Gwagwa, Phumzile Langeni and Chris Seabrooke will continue as independent non-executive directors, while Pattison and chief financial officer Guy Hayward will stay on as executive directors.
New appointments are Walmart representatives McMillon, Jeff Davis, the senior vice-president of finance and treasury, and JP Suarez, the senior vice-president of international business development.
Dods Brand, Kuseni Dlamini, Jim Hodkinson, Nigel Mathews, Peter Maw and Dawn Mokhobo resigned as directors.
Yesterday Massmart closed 1.41 percent lower at R132.70, after shareholders who held the stock on June 9 were paid R148 a share for 51 percent of their holdings. - Samantha Enslin-Payne