Walmart Stores, the world’s largest retailer, said it will seek to buy 51 per cent of South Africa’s Massmart Holdings, stopping short of full ownership to gain support from shareholders and the government.
Walmart scaled back a plan to acquire all of Johannesburg-based Massmart after some “emerging-market funds” indicated opposition to the 148 rand-a-share offer, Guy Hayward, Massmart chief financial officer, said on a conference call today.
“The drive for a partial offer, that left Massmart listed, came mostly from shareholders,” Hayward said. Offshore investors, holding as much as 72 per cent of Massmart, said they “would be sad see it leave investment boards.”
The partial offer is worth 16.5 billion rand ($2.3 billion) and values the South African retailer at about 32 billion rand. The price is the same as when the proposed transaction was announced on September 27. Walmart is seeking to expand internationally to make up for slowing growth in the US, where same-store sales have fallen for six consecutive quarters.
Walmart has a similar ownership structure in Mexico, where it owns 68 per cent of Walmart de Mexico SAB. The Bentonville, Arkansas-based retailer operated more than 4,000 stores in 14 countries outside the US through April, with sales abroad topping more than $100 billion in the most recent fiscal year.