General News of Monday, 27 September 2010
Wal-Mart offers $4.2 Mil to enter South African Market
The world's biggest retailer, Wal-Mart, announced plans on Monday of a proposed takeover of Massmart, a Johannesburg-based chain of discount superstores, causing the local index to surge.
The JSE closed higher on Monday following news that Bentonville, Arkansas-based Wal-Mart has chosen retailer Massmart as its vehicle for expansion into Africa. Wal-Mart said in August that cash flow was about $4.5 billion, compared with $4.2 billion in the prior year.
The vast majority of Massmart's outlets are in South Africa but the company has several across other African countries including Ghana, Nigeria, Tanzania and Zimbabwe.
Wal-Mart has begun buyout negotiations with the management of Massmart, which runs 290 stores in 13 African countries under brand names such as Makro, Game and Builders Warehouse.
The potential deal will become the largest overseas venture since its purchase of Britain's Asda chain 11 years ago.
The business was founded in 1990 by Mark Lamberti, who remains chairman of Massmart and has become one of South Africa's best-known entrepreneurs.