NEW YORK — Wal-Mart Stores may give up its quest to buy a controlling stake in South Africa’s Massmart Holdings Ltd., if South Africa forces local procurement conditions on the retailers, the companies said, the Associated Press reported.
Wal-Mart’s bid to buy 51% of Massmart has been opposed by the South African government and labor unions worried about jobs and protecting local manufacturers and suppliers. During hearings before South Africa’s Competition Tribuna, some government officials have joined foreign activists in arguing the deal should be rejected unless Wal-Mart is required to take steps to protect jobs. But Wal-Mart said requiring it to buy an undetermined percentage of South African goods -- to protect local manufacturing jobs -- would give an unfair advantage to competitors not subject to such conditions.
“The parties may reluctantly walk away from the deal if there are conditions on local procurement,” Jeremy Gauntlett, senior counsel for the two companies, said at antitrust hearings in Pretoria on Monday, the report said.
Imposing conditions that Wal-Mart buy South African goods will contravene international trade accords and give competitors an unfair advantage, Gauntlett said.
Wal-Mart and Massmart made some concessions Monday, pledging not to lay off any Massmart employees for the next two years and to respect Massmart's existing labor agreements for as long as the tribunal says is necessary, the Associated Press said.