Nov. 23 (Bloomberg) -- Massmart Holdings Ltd.’s chairman said the appeal court hearing opposition to Wal-Mart Stores Inc.’s takeover of South Africa’s biggest food and general-goods wholesaler may make a “sound” ruling by early next year.
The South African Commercial, Catering and Allied Workers Union, fearing job losses, has asked the Competition Appeal Court to overturn the tribunal’s May 31 clearance of Wal-Mart’s purchase of a 51 percent holding in Johannesburg-based Massmart.
“We’re hoping that Judge Davis will come out with a sound ruling,” Massmart Chairman Mark Lamberti said in an interview in Johannesburg today. “Some of the comments he made during that hearing suggest that he will.” Judge Dennis Davis, the court president, heard the appeal last month.
Wal-Mart, the world’s largest retailer, paid 16.5 billion rand ($2.05 billion) in June for the stake in Massmart. On June 26, the Bentonville, Arkansas-based company said it would create 15,000 jobs in South Africa within five years and spend about 60 billion rand more on food or fast-moving consumer goods in the period, most of which would go to local suppliers.
Lamberti told Bloomberg today he expects the ruling “some time later in the year or early next year.” Massmart is not worried about how long the process is taking, adding it’s not much longer than in many other countries and that it’s a “large transaction, it’s important to the country.” Wal-Mart announced its intention to take over the company a year ago.
Massmart said in a statement today total sales in the first 21 weeks of fiscal 2011 grew 15.2 percent. It expects sales to continue to be “strong, supported by our present investments in price, growth, capacity and integration.” That will, however, “put downward pressure on operating profit, before foreign exchange translation, in the short-term, particularly for the half-year to December 2011.”
The case is South Africa Commercial, Catering and Allied Workers Union v Wal-Mart Stores Inc. and Massmart Holdings Ltd., 111/CAC/Jul11.
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