Walmart rethinks its shopping plans

Walmart has announced that it is revising its plan to acquire 100% of the South African retailer, Massmart. Walmart is still intending to take a majority stake in the company – some 51% for $2.4bn – and this revised move satisfies Massmart’s board and still leaves the company listed on the JSE.

This won't be the first time that Walmart has taken a controlling stake rather than pursuing 100% of a company. It has been successful in Mexico where it owns a controlling stake in Walmex, which has also retained its listing. So the omens are good for this strategy in South Africa.

Walmart still seems to be a company which polarises opinion as much say as Tesco here in the UK. But evidence would suggest that if a market needs shaking up and an incumbent player has struggled to do this, as in the case of Massmart, then the entry of a supermarket superpower like Walmart should only be good for customers.

Filed under: food, M&A, retail, supermarket, Africa