Wal-Mart Plans to Purchase Massmart in $4.2 Billion Deal
Wal-Mart is on the move again, this time bringing the "roll-back smiley" to the South African consumer. Wal-Mart, the world’s largest retailer, has offered to purchase Massmart Holdings Ltd., in a transaction worth about $4.2 billion.
Massmart, a top retailer and distributor located on the African continent, runs 290 stores in 13 countries in Africa, with most of its eight wholesale and retail chains located in South Africa; the company also manages eight wholesale and retail chains under different brand names.
Currently Wal-Mart consists of 4,230 stores, employing more than 660,000 in 15 countries outside of the U.S. Domestically, store sales have fallen for five consecutive quarters — due to the economy, as well as internal mistakes such as cutting inventory and not promoting everyday low prices — and the company is focused on international growth.
Doug McMillan, President and CEO of Wal-Mart International states, “We are continuing to deploy our strategy to accelerate growth and improve returns in our international business, and this region of the world fits with our focus on large, high growth markets.”
Although this strategy hasn’t always been successful, with the company failing to thrive in marketplaces such as Germany and South Korea, it is clear that the overseas marketplace is very much viable. It is estimated that the Sub-Saharan Africa growth will probably reach 5 percent in 2011.
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