Wal-Mart gets go-ahead in South Africa

[March 09, 2012]  JOHANNESBURG (AP) -- Wal-Mart, the world's biggest retailer, can go ahead with its 17 billion rand ($2.2 billion) purchase of a controlling share of a South African chain, a South African regulatory appeals body said Friday.

The Competition Appeal Court upheld a ruling last year by the Competition Tribunal, the government agency charged with promoting competition and protecting consumers. The appeal court, however, did call in its ruling for a study to determine the best way to protect small producers who might not be able to compete with foreign producers from whom Wal-Mart can import cheaper goods. Wal-Mart and Massmart had already agreed to spend 100 million rand (about $13 million) over three years to help farmers and other South African suppliers gear up to do business with Wal-Mart.

The appeal court also called for the reinstatement of 503 workers who lost their jobs in what unions said was a step by Massmart to make itself more attractive to Wal-Mart.

Potential investors had said they were closely watching for the ruling, which could signal South Africa openness to foreign investment. The Wal-Mart-Massmart partnership has been operating in South Africa since last year pending Friday's ruling.

South African unions and some government officials worry Wal-Mart's arrival will hurt jobs and local manufacturing. Wal-Mart and Massmart contend together they will be able to offer low prices and a range of goods that will benefit South African consumers.

The appeals court said Friday that "there was insufficient evidence to conclude that the detrimental effects of the merger would outweigh the clear benefits."

[Associated Press; By DONNA BRYSON]

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