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Wal-Mart: Union appeal no threat to Massmart deal
June 29, 2011 / 11:21 AM / in 6 years

Wal-Mart: Union appeal no threat to Massmart deal

JOHANNESBURG (Reuters) - South Africa’s biggest service industry union is appealing Wal-Mart’s (WMT.N) takeover of Massmart (MSMJ.J), the two companies said on Wednesday, adding the appeal will not derail the $2.4 billion deal.

The world’s largest retailer on June 20 finalized its purchase of 51 percent of local discounter Massmart, after winning approval from South Africa’s competition authorities.

The South Africa Commercial, Catering and Allied Workers Union (SACCAWU) has filed a notice of appeal with the country’s Competition Appeal Court, the two companies said in a joint statement.

Filing the notice is an early stage in the appeal process.

No one was immediately available for comment at SACCAWU.

“This is not an unexpected development and the companies remain firm in their belief that the transaction rests on solid legal ground,” Wal-Mart and Massmart said.

“SACCAWU’s notice of appeal has no impact on the implementation of the transaction,” they said.

South African competition authorities approved the deal with token conditions last month. Experts have said unions may have some legal room to dispute the deal.

Massmart said on Sunday it aims to create 15,000 jobs in South Africa and increase its procurement of food and consumer goods by an additional 60 billion rand ($8.8 billion) over the next five years.

Shares of Massmart (MSMJ.J) were up 1.3 percent at 140.25 at 1106 GMT, compared with a 1 percent rise in the Top-40 index of blue chips.

Reporting by David Dolan; editing by Ed Stoddard

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