Wal-Mart’s Massmart acquisition faces South Africa court appeal

Cape Town, South Africa -- A Thursday report by Bloomberg said that South Africa’s Competition Appeal Court began hearing a government lawsuit filed to compel regulators to review a decision allowing Wal-Mart Stores to acquire 51% interest in Massmart Holdings Ltd.

The Competition Tribunal ruled on May 31 that Wal-Mart could proceed with the deal on condition no jobs are cut for two years and the companies set up a $12.4 million fund to assist local suppliers and manufacturers. The government objected, saying the conditions were inadequate to protect the economy and prevent a surge in imports undermining manufacturing output.

The court challenge is focused on the procedure that was adopted by the Competition Tribunal in making its decision, according to Bloomberg’s report, which cited comments by Heather Irvine, a director at law firm Norton Rose. The retailers provided inadequate information about their product sourcing, meaning “the tribunal was unable to make a proper decision on the effects of the merger and what conditions should be imposed,” Irvine said.

Both retailers are opposing the appeal and the review.