(Updates with lawmaker’s comment starting in second paragraph.)
July 19 (Bloomberg) -- South Africa’s parliament will leave anti-trust regulators to decide what conditions to impose on Wal-Mart Stores Inc.’s purchase of Massmart Holdings Ltd., a lawmaker said.
Parliament’s economic development committee began three days of hearings on the deal in Cape Town today. The aim is to assess the takeover’s impact on jobs and manufacturing, said Mmathulare Coleman, the committee’s chairwoman.
The Competition Tribunal ruled on May 31 that the world’s biggest retailer could proceed with its 16.5 billion rand ($2.4 billion) purchase of a controlling stake in Johannesburg-based wholesaler Massmart on condition no jobs are cut for two years. The tribunal’s decision is being appealed by the South African Commercial, Catering and Allied Workers Union in the Competition Appeal Court.
“The approval of the Wal-Mart-Massmart merger and the conditions imposed by the Competition Tribunal cannot be entertained during these public hearings” as the matter is still before the courts, Coleman told committee members.
South African Trade Minister Rob Davies has objected to the deal, saying it would have a “destabilizing” impact on the economy as a surge in imports may undermine manufacturing output.
Wal-Mart’s entry into South Africa is likely to drive down prices to the benefit of consumers and create jobs, Coenraad Bezuidenhout, acting executive director of economic policy at Business Unity South Africa, a business group, told lawmakers.
Labor unions and executives from Wal-Mart and Massmart are due to make presentations tomorrow.
Unions “remain convinced that Wal-Mart’s takeover is not in the best interests of this country and will continue to oppose the deal,” the Congress of South African Trade Unions, the country’s largest labor grouping, said in an e-mailed statement today. “It will not promote but stifle competition, as Wal-Mart strives to dominate and monopolize the sector.”
--Editors: Philip Sanders, Digby Lidstone
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