New York City -- Regulators in South African on Tuesday approved Wal-Mart's 17 billion rand (about $2.4 billion) bid to buy a controlling share of Massmart Holdings Ltd. The Competition Tribunal of South Africa approved the deal on the condition that no job cuts take place for two years. It also requires the merged entity to give employment preference to 503 Massmart employees who lost their jobs.
Other conditions include a $14.6 million commitment to establish a program to develop local suppliers, honoring existing labor contracts, and recognition of the South African Commercial, Catering and Allied Workers’ Union as representative of the bargaining units for at least three years. The union was one of several unions that opposed the deal.
Wal-Mart had initially sought to buy all of Massmart, but reduced its bid to 51% on the advice of Massmart shareholders, because that means the new entity will continue to be listed on the Johannesburg exchange.
The deal was overwhelmingly approved in January by Massmart shareholders. It is Wal-Mart’s largest acquisition since buying Asda of Britain in 1999 for more than $10 billion.