Wal-Mart Gets OK in South Africa

Wal-Mart has received permission from the South African regulatory appeals body to move ahead with its $2.2 billion purchase of a controlling share of a South African retailer Massmart.

The Competition Appeal Court, which upheld a ruling last year by the Competition Tribunal, did require a study to determine how to protect small producers who might not be able to compete with foreign producers from whom Walmart can import cheaper goods.

Walmart and Massmart will spend $13 million over three years to help farmers and other South African suppliers do business with Walmart.

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 Walmart.

The Walmart-Massmart partnership has been operating in South Africa since last year pending last Friday's ruling.

The challenges from South African unions and some government officials were similar to those typically heard in U.S. alleging that Walmart will hurt local jobs and local businesses. Conversely, as has often been the response, Walmart and Massmart claim they will be able to offer low prices and a range of goods that will benefit South African consumers.

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