Report: Wal-Mart executives discuss South Africa acquisition
Bentonville, Ark. -- A report Thursday by the Associated Press said that Wal-Mart Stores executives met Thursday to discuss the proposed Massmart acquisition, which is expected to close in June.
According to the report, as Wal-Mart expands its international business, the company wants to bring ideas it gains from the South African chain to other markets.
The $2.4 billion purchase of a majority interest in Massmart, which operates 263 stores in South Africa, will put Wal-Mart in the building supply business, one of a variety of Massmart store formats.
J.P. Suarez, senior VP of international business development, told AP that Wal-Mart intends to expand Massmart's footprint in southern Africa, and that a priority will be to offer more refrigerated food, a category lacking among Massmart and its competitors, Suarez said.
Massmart's home building supply stores will be a new venture for Wal-Mart, which Suarez said may have potential for further development.
"We do want to take that capability and learn and apply it to any other market it might be relevant to," Suarez said.
Wal-Mart had to make concessions for the Massmart deal to go through, including promising to honor existing labor agreements for three years and not lay off any workers for two years.
Suarez noted South Africa's Competition Commission's approval of the deal could be appealed, but he expects it to close as scheduled.