Walmart Inc, the US giant, has signed an agreement to buy an additional 47% stake in South African retailer, Massmart, a move which will ensure its total take-over of the retail giant.
Also, the offer would allow Walmart to cut costs, invest more capital and turn around Massmart which has been posting losses and losing market share to bigger local rivals.
Massmart and Walmart disclosed this in a joint statement on Thursday. But Massmart added that its majority owner Walmart had offered it 6.4 billion rand ($373 million) to purchase the remaining shares and to delist the company from the Johannesburg Stock Exchange.
“Ordinary shareholders are hereby advised that Massmart and Walmart entered into an implementation agreement on 31 August 2022, in terms of which Walmart indicated its firm intention to make an off.
It essentially means that the company has the cash in hand to go ahead with the purchase and will now seek approval from authorities.
The two boards, however, are of the view that the proposed transaction would enable Walmart to continue its “overweight” support as a long-term shareholder and allow Massmart shareholders to realize value.
