Walmart to Delist Africa’s Massmart in Deal to Buy Out Retailer

Walmart has struck a deal to fully acquire Massmart and purchase the shares it doesn’t already own for 62 rand ($3.65) each, with the deal also delisting the African retailer from the Johannesburg Stock Exchange (JSE) if approved.

“This Potential Offer, if finalized, is a vote of confidence in SA by the world’s leading retailer,” Massmart tweeted on Monday (Aug. 29).

The per-share offer from Walmart “represents a premium of 53% to the closing share price and a 62% premium to the 90-day volume weighted average share price” calculated when the market closed on Friday (Aug. 26), according to a Massmart press release.

Walmart bought a majority stake in Massmart in 2011 for 16.5 billion rand. If the deal is finalized, the company’s turnaround plan can move forward following rocky financials in part due to COVID-19, civil unrest and flooding in KwaZulu-Natal earlier this year.

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Those large-scale issues compounded otherwise weaker demand from consumers and an increasingly competitive environment, per the release.

Civil unrest in its core market in July 2021 led to the closure of 43 stores and resulted in lost sales, PYMNTS reported earlier this month. There was also a week of South African riots last year that left several people dead. Now, the region is dealing with higher interest rates, nationwide cuts in power and a stalled economy.

In its half-year results released Monday, Massmart reported a loss of R903 million from a R359 million loss in the same period last year, per Reuters. Sales grew almost 2% to R38.1 billion.

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In a move unrelated to the Walmart offer, Massmart CEO Mitch Slape is set to step down at the end of the year, with Massmart Group Chief Operating Office Jonathan Molapo taking over.

Molapo was the CEO of Astron Energy before he joined Massmart in January, according to his LinkedIn. Massmart owns brands such as Makro, Game, Jumbo, Builders and others.

Slape initiated Massmart’s turnaround since his appointment to lead the business in September 2019 and led key initiatives to reduce expenses, revamp Game’s store proposition and launch an eCommerce investment program, according to the release.

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