Walmart (Bentonville, Ark.) has purchased a 51-percent stake in Massmart (Johannesburg, South Africa) for $2.3 billion, giving the largest retailer in the world control of Africa’s largest retailer of general merchandise, liquor, home improvement equipment and wholesaler of basic foods.
The purchase will increase Walmart’s presence by 288 stores in 14 countries of sub-Saharan Africa and will help Massmart increase its expansion and increase its food retailing business, according to Reuters.
Massmart’s chief executive, Grant Pattison, said the company will retain South African management after the deal, which analysts say will help Walmart avoid a backlash from some of South Africa’s most powerful trade unions.
Massmart sharess were up 0.2 percent after the announcement. One analyst told Reuters that Walmart’s ownership of a majority stake allowed the retailer the control it needs while also appeasing Massmart’s shareholders.