Wal-Mart plans to buy a controlling stake in South African wholesaler Massmart for over $2 billion after scaling back its offer for the company's entire stock, Massmart said on Nov. 29. Wal-Mart initially offered $4.2 billion.
"The total transaction is valued at approximately 17 billion rand for 51% of Massmart," the company said.
In September, the world's largest retailer launched an offer for Massmart but the company later announced that it was to reduce its bid, following talks between the firms.
"If approved, the transaction promises to be very positive for the regional economy, facilitating job creation, providing new opportunities for small and medium businesses and improving competitiveness," said Massmart chief executive Grant Pattison.
Massmart is the country's biggest wholesaler and operates 288 stores in 14 countries around Africa.
According to Massmart, the majority offer would ensure that the company remains listed on the Johannesburg Stock Exchange (JSE), enabling shareholders to continue to participate in future growth.
Wal-Mart's offer angered labor unions, with the powerful Cosatu labor federation calling the company one of the worst union-bashing employers in the world. The union also feared that the giant retailer, which is known for cheap prices, would undermine local firms.
The Bentonville, Arkansas-based company reported a record net profit of $3.32 billion in the first quarter of 2010, pushed by strong sales in China, Brazil and Mexico.
Copyright Agence France-Presse, 2010