A South African chain's shareholders have overwhelmingly accepted Walmart's offer to buy 51 percent of their company, the chief executive said Monday, paving the way for the giant U.S.-based retailer to enter Africa.
Massmart said the proposal was approved by 97 percent of shareholders who voted Monday; 75 percent had been needed. Walmart offered about $20 per share in a deal of about $2 billion.
The deal will have to be approved by South Africa's anti-monopoly regulators.
Grant Pattison, Massmart CEO, said once the deal goes through, Massmart will continue to operate the stores and continue to be listed on the Johannesburg Stock Exchange, while Walmart will be the main owner. Massmart runs about 290 big-box, pharmacy, electronics and other stores in 14 African countries.
"They are a great retailer, and we really are looking forward to learning something from them, and teaching them something about Africa," Pattison told the Associated Press. "We're excited because they're coming as our partners."
Walmart, based in Bentonville, Ark., has 8,692 stores in 15 countries, among them Brazil, China and India. But until now, it had not ventured into Africa.
South Africa has the most developed economy on a continent slowly emerging from grinding poverty and one that fared better than other parts of the world during the global recession. Consulting firm McKinsey & Company has concluded that global business cannot afford to ignore Africa's potential, or its growing middle class. The World Bank has said the continent finally is seeing the results of years of market reforms and investment in education and health care.
Business here has welcomed Walmart's arrival as recognition of the potential of the continent's economy and of the reach that South African retailers have throughout Africa.
South African labor groups, though, say Walmart is anti-union. Walmart has said it would respect contracts and is committed to working with South African unions.
Sidumo Dlamini, president of the powerful Congress of South African Trade Unions, was at Massmart's Johannesburg headquarters for Monday's shareholders' vote. He said that while the approval was expected, he was disappointed.
The deal holds "nothing for the workers. We have empirical evidence from other countries where Walmart is operating. It has never done anything for the workers," Dlamini said.
Labor activists from South Africa and abroad addressed the shareholders' meeting. One of the speakers, Michael Bride of the 1.3 million-member United Food and Commercial Workers International Union of USA and Canada, said he had not expected shareholders to turn down the offer.
"Shareholders can be forgiven for voting in their own interest," Bride said.