Wal-Mart Stores and Massmart have offered a fresh pledge on job security as they look to push through the US retail giant’s proposed takeover of the South African retailer.
The companies are awaiting competition approval before they can complete the US$2.3bn takeover deal that would see Wal-Mart take a controlling 51% stake in Massmart.
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However, the takeover has been vigorously opposed in some political quarters and by South African unions, who have claimed that it is “not in South Africa’s interest” to let Wal-Mart into the market and that the deal should be rejected unless the company is required to take steps to protect South African jobs.
In a bid to subdue its critics, Wal-Mart and Massmart have pledged not to cut jobs for two years after completion of the acquisition.
In a joint statement, Wal-Mart and Massmart said the merged entity would “ensure that there are no retrenchments, based on the merged entity’s operational requirements in South Africa, resulting from the merger for a period of two years from the effective date of the proposed transaction”.
However, the companies rejected calls for the group to be required to buy a percentage of South African goods, insisting that any such requirement would break world trade regulations and was not guaranteed to be an effective way to safeguard jobs.
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By GlobalDataThe companies warned that if such restrictions were imposed they would be forced to appeal the decision or “reluctantly to walk away from the transaction”.
The Competition Tribunal hearing into the acquisition entered its last day today (16 May). The Tribunal is expected to rule in the next week on whether the deal can go ahead.
