Tribunal to decide retail giants' deal

The Competition Tribunal will next week consider the recommendation by the Competition Commission that the purchase of Massmart Holdings by US retail giant Walmart be approved unconditionally.

The buy-out has met with the vitriolic opposition of trade unions, which have asked the tribunal to prohibit it or impose stringent conditions.

But the commission said it could find no reason to prohibit the deal .

Walmart operates throughout the world, including in Canada, Brazil, China, Chile and Japan. It retails a wide range of products, from groceries to consumer electronics, furniture and clothing.

Massmart is a wholesaler and retailer of groceries, liquor and general merchandise. Stores in the Massmart group include Game, Dion Wired, Makro, Builders Warehouse and Masscash.

Walmart says it wants more exposure in emerging markets, especially South Africa and the sub-Saharan region. It believes South Africa is a key market because it accounts for about 20% of consumer spending on the continent .

Walmart said South Africa is a sophisticated market with a stable economic, political and regulatory environment. It regards Massmart as being an ideal entry point into the region.

Though the commission received several submissions from unions and industry bodies during its assessment of the deal, it had not received government submissions by the time it had to file its recommendation with the tribunal.

After the filing, the tribunal received a joint submission on the merger from the departments of Economic Development, of Trade and Industry, and of Agriculture, Forestry and Fisheries.

The departments said they were concerned about the effect the merger might have on labour, and on small and medium-sized business.