Why US giant Walmart wants all of SA Massmart at R62 a share - Walmart buying the remaining shares of Massmart would give the struggling retailer financial and operational support to help turn it around, the group said
If the deal was successful, Massmart would be delisted from the Johannesburg Stock Exchange.
The value of Massmart has slumped by 80% since Walmart bought into it, as the retailer struggled to remain relevant in a weak economy.the potential offer, if finalised, would provide it with needed access to ongoing financial and operational support from Walmart to sustain the group’s turnaround, which had been impeded by external factors such as Covid-19-related trading restrictions, the unrest in KwaZulu-Natal and a challenging economic environment.
McLachlan explained that Walmart had been supporting Massmart financially for years. Eventually, he argued, Walmart would either have had to sell, “although I am not sure who it would sell it to”, or take Massmart under its wing.Walmart had to provide “increasing levels of support” to Massmart, including R4-billion in liquidity during the 2020 lockdown, which Walmart converted 50% into equity, Massmart said in a statement.
“Even if the deal in its current shape or form does not go ahead, this is a reaffirmation for Massmart which is very good for South Africa … We could not be in a country where Massmart failed; that would have far-reaching consequences.”
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