Wal-Mart bid for Massmart approved, boycott looms
JOHANNESBURG (Reuters) - South African retailer Massmart's (MSMJ.J) shareholders have accepted a takeover by U.S. group Wal-Mart (WMT.N), setting up the world's largest retailer for a potential battle with local unions.
Massmart shareholders met on Monday to vote on the $2.3 billion offer. More than 97 percent of those present approved the deal, bringing total shareholder approval to nearly 79 percent, according to chairman Mark Lamberti.
COSATU, South Africa's largest labor federation, threatened the "mother of all boycotts" in opposition to the deal.
While Wal-Mart has long tussled with organized labor in the United States, unions wield enormous power over South African politics and the economy.
"If the deal goes through, COSATU will do what it does best. We will organize the mother of all boycotts against Massmart," COSATU's first deputy president, Tyotyo James, told shareholders immediately before the vote.
Wal-Mart has said it will honor Massmart's agreements with unions and that South African management would be retained.
Analysts have said keeping local expertise would be critical to avoid a bruising fight with unions. COSATU is in a governing alliance with the ruling ANC and wields enormous power.
"The union can muster support for the boycott but if they sustain the industrial action, I think that's a little bit over the top," Syd Vianello, analyst at Nedcor Securities.
"Massmart runs some of the cheapest stores so even if they can get some support in the beginning, I think common sense will prevail over some fundamental issues."
The South African Commercial, Catering and Allied Workers Union (SACCAWU), a COSATU affiliate, has formed an "Anti-Walmart Coalition" that plans to ask South Africa's competition watchdog to block the deal or attach tough conditions.
The coalition wants to keep existing labor and supplier agreements, among other things.
(Editing by David Dolan, Mike Nesbit and David Hulmes)
WASHINGTON - U.S. private-sector hiring rose in November at the fastest clip in a year, suggesting the labor market was improving enough for the Federal Reserve to soon start trimming its bond purchases.
- U.S. small businesses boosted borrowing in October to its highest level in over six years, an index showed on Tuesday, fresh evidence that the budget battle that shut the federal government for 16 days did little to derail underlying economic growth.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.