Walmart Inc. has reached a deal to acquire the remaining 47% of ownership in South African retailer Massmart, the firms said in a joint statement on Thursday.
Massmart said on Monday that Walmart, which owns most of the company, has offered $373 million to buy the rest of the company’s shares and take it off the Johannesburg Stock Exchange.
Walmart would be able to decrease expenses, invest more resources, and turn around Massmart, which has been incurring losses and losing market share to larger local competitors, with this offer.
Related: Walmart has proposed a $79 million investment in South African retailer Massmart.
“Ordinary shareholders are now notified that Massmart and Walmart agreed to an implementation agreement on August 31, 2022, pursuant to which Walmart announced its strong intention to make an offer,” the businesses said.
The firm plan means that the company has the money to complete the purchase and will now ask the government for permission.
According to the two boards, the proposed deal would allow Walmart to continue its “overweight” support as a long-term stakeholder and provide Massmart owners with the opportunity to realise value.
Since acquiring its interest in Massmart in 2010, Walmart has attempted many tactics to make Massmart a leading retailer in South Africa, but has failed owing to competition from Shoprite, Woolworths, and Pick N Pay.
The proposed purchase reaffirms Walmart’s commitment to Massmart and South Africa, according to the statement.
Related: Walmart.com attracted people with more money who wanted to buy food.
Walmart will use its cash reserves to buy the shares, and the deal is expected to be finished by December 31. More information will be made available on September 23.
($1 = 17.1678 rand)
