JOHANNESBURG — A South African chain’s shareholders have overwhelmingly accepted Wal-Mart’s offer to buy 51 percent of their company, the chief executive said Monday, paving the way for the giant U.S.-based retailer to enter Africa.
Massmart said the proposal was approved by 97 percent of shareholders who voted Monday — 75 percent had been needed. Wal-Mart offered about $20 per share in the $2 billion deal.
The deal will have to be approved by South Africa’s anti-monopoly regulators.
Massmart CEO Grant Pattison said once the deal goes through, Massmart will continue to operate the stores and to be listed on the Johannesburg Stock Exchange, while Wal-Mart will be the main owner. Massmart runs about 290 big-box, pharmacy, electronics and other stores in 14 African countries.
“They are a great retailer, and we really are looking forward to learning something from them and teaching them something about Africa,” Pattison told The Associated Press. “We’re excited because they’re coming as our partners.”
Wal-Mart, based in Bentonville, Ark., has 8,692 stores in 15 countries, including Brazil, China and India. But until now, it has not ventured into Africa.
South Africa has the most developed economy on a continent slowly emerging from grinding poverty and one that fared better than other parts of the world during the global recession. Consulting firm McKinsey & Co. has concluded that global business cannot afford to ignore Africa’s potential or its growing middle class. The World Bank has said the continent is finally seeing the results of years of market reforms and investment in education and health care.
Business in South Africa has welcomed Wal-Mart’s arrival as recognition of the potential of the continent’s economy, and of the reach South African retailers have throughout Africa.
South African labor groups, though, say Wal-Mart is anti- union. Wal-Mart has said it would respect contracts and is committed to working with South African unions.
