Subscribe Login
DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Retail

Walmart Offers To Buy South African Retailer Massmart

US retail giant Walmart Inc has launched a 6.4 billion rand (€380 million) offer for the 47% of Massmart shares it does not already own, a deal Massmart said would support the overhaul of the loss-making South African retailer.

Massmart's announcement of the offer sent its shares up 46%. If approved by shareholders, the retailer would be delisted from the Johannesburg Stock Exchange.

Walmart has offered 62 rand for each outstanding Massmart share, which represents a premium of 53% to Friday's closing share price, Massmart added.

Since acquiring majority control over Massmart in 2010, the US retailer has had to provide increasing levels of financial and operational support across Massmart's businesses.

Turnaround Plan

Massmart's management launched a turnaround plan in 2019 that involved selling off non-core assets, removing fresh food from its Game stores and cutting costs across the group.

But issues such as the COVID-19 pandemic and the civil unrest in 2021 had held up the turnaround plan, Massmart said.

"The potential offer, if finalised, will provide Massmart with needed access to ongoing financial and operational support from Walmart to sustain the group's turnaround," it added.

Massmart chairman Kuseni Dlamini told reporters in a call that a preliminary report from an independent expert indicates that the terms and conditions of the offer are fair and reasonable.

The retailer posted a headline loss in the 26 weeks ended 26 June of 903.5 million rand (€53.8 million), from a loss of 358.5 million (€21.3 million) rand a year before.

For its financial year to 26 December 2021, the company flagged a wider annual loss as it was impacted by damage to its stores and lower trading income due to looting during the country's civil unrest last year.

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

Stay Connected With Our Weekly Newsletter

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our Terms & Conditions and Privacy Policy
Enjoy unlimited digital access for 30 days
Get exclusive access to the latest grocery retail & FMCG news, interviews with industry leading executives, and expert analysis on the trends shaping the sector today
Enjoy unlimited digital access for 30 days
Enjoy unlimited digital access for 30 days
Get exclusive access to the latest grocery retail & FMCG news, interviews with industry leading executives, and expert analysis on the trends shaping the sector today
Enjoy unlimited digital access for 30 days