* No further talks for Wal-Mart unit to buy Kenyan retailer
* African growth attracts retailers
(Adds analyst comment)
By Duncan Miriri
NAIROBI, Oct 16 Wal-Mart's push for a
foothold in east Africa hit a hurdle after Kenyan retailer
Naivas said on Wednesday it was no longer selling a controlling
stake to the U.S. company's South African subsidiary, Massmart.
Strong economic growth in Africa is attracting global
retailers such as Wal-Mart Stores Inc, which acquired Massmart
in a $2.4 billion deal two years ago. Sub-Saharan Africa is
expected to grow by 4.9 percent this year after 4.2 percent in
2012, the World Bank said.
But analysts say a scarcity of suitable land and high
valuations are hindering South African retailers' ambitions to
spread their wings around the rest of Africa.
Naivas chairman Simon Mukuha had said in August they were
looking to sell a majority stake, 50 percent plus one share, to
Massmart, to bring in fresh blood and ideas.
"We are fattening our cow. As and when we are ready we will
do that (sell) but as it is now we are not," Gilbert Mwangi, the
administration manager at Naivas, told Reuters.
"They (talks with Massmart) are off. We are not selling
The chief executive of Massmart, which has failed to keep up
with South African rival Shoprite's aggressive
sub-Saharan expansion, said the company was still keen on
"We are not rethinking our investment decision in Kenya. We
are still looking for a partner and we are still opening our
first Game store, possibly by the end of next year," Grant
Pattison told Reuters on Tuesday at a conference in
Johannesburg, referring to one of its brands.
Massmart runs 29 stores in 11 African countries outside
South Africa which contribute about 8 percent of its total
sales. It has said all but 10 to 15 stores to be opened over the
next three years would be in South Africa.
A Massmart and Naivas deal could have fallen victim to the
tightness of the market in the region.
"Smaller supermarket chains are in such high demand that
they would ask for a horrendous price. So it is possible that
the price may have sunk that deal," said Abri du Plessis, Chief
Investment Officer at Cape Town-based Gryphon Asset Management.
Naivas has 28 stores, fewer than its rivals, the
privately-held Nakumatt and Uchumi Supermarkets.
(Additional reporting by David Dolan and Tiisetso Motsoeneng in
Johannesburg; Editing by Drazen Jorgic and Patrick Lannin)