South African retail group Massmart confirmed that Walmart has made an offer of 6.4 billion ($373 million) to purchase the 47% stake in the company that it does not yet own. Furthermore, the U.S. retail giant intends to delist Massmart from the Johannesburg Stock Exchange.
Already the majority shareholder in the company, Walmart intends to use its increased control to invest more capital, cut costs, and bring strategic change to Massmart, which has been incurring losses and consistently losing market share to local rivals.
The companies released a joint statement on Thursday confirming the offer which read: “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 offer.”
Walmart intends to make the purchase using its cash reserves, eyeing December 31st as the deadline to complete the purchase. Both companies’ boards view this deal as Walmart reaffirming its commitment to Massmart and South Africa, having first bought a stake in Massmart in 2010.
Since entering the South African retail market, Walmart has struggled to transform Massmart into South Africa’s go-to retailer, facing stiff competition from Pick N Pay, Shoprite, and Woolworths.