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Opponents seeking a second chance in South Africa


The ministers of economic development, trade and industry and agriculture, forestry and fisheries in South Africa are protesting the nation’s Competition Tribunal’s approval of a merger agreement between Walmart and Massmart. The three government entities are seeking to set aside a ruling that allowed Walmart to acquire a 51% ownership stake in Massmart last month on the grounds that the tribunal acted irregularly with regard to matters of documents presented during the discovery process and the scheduling of decisions.

“The tribunal erred in making the discovery order by failing to order the merging parties to discover all the documents sought by the applicants,” read a filing submitted to the competition appeals court by the ministers. “The tribunal erred in making the scheduling decision in that they precluded the parties who opposed the merger, or had otherwise intervened, including the applicant, from fully and properly ventilating their concerns and their submissions on the condition to which any approval should be subject.”

The merger was subject to some familiar opposition that Walmart has become quite adept at rebutting for the simple fact that no matter where the company goes it is confronted by lingering perceptions related to it negative impact on the economy, poor treatment of workers, impact on suppliers, etc. All those issues surfaced in South Africa and to get the Massmart deal done Walmart agreed to some concessions. For example, there are to be no staffing cuts for two years and union agreements are to be honored for three years. The company also agreed to allocate funds to a supplier development program to work with smaller local suppliers concerned about being shut out of the retail sector by Walmart’s global sourcing efforts.

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