Walmart offers to buy South African retailer Massmart in a $377 million deal

US retail giant Walmart (NYSE:WMT) Inc launched a 6.4 billion rand ($377.6 million) offer for the 47% of Massmart shares it doesn't already own, saying Massmart would support the turnaround of the loss-making South African retailer.

Massmart's bid announcement sent its shares up 46%. If approved by shareholders, the retailer will be delisted from the Johannesburg Stock Exchange. Massmart added that Walmart was offering 62 rand for each Massmart share, representing a 53% premium to Friday's closing share price. Since acquiring majority control of Massmart in 2010, the US retailer has had to provide increasing levels of financial and operational support to Massmart's businesses. In 2019, Massmart management launched a turnaround plan that included selling non-core assets, removing fresh food from Game stores and cutting costs across the group. However, Massmart said issues such as the COVID-19 pandemic and civil unrest in 2021 delayed the turnaround plan. "The potential offer, if finalized, would give Massmart much-needed access to continued financial and operational support from Walmart to sustain the group's turnaround," he added. Massmart Chairman Kuseni Dlamini told reporters that a preliminary report from an independent expert showed that the terms and conditions of the offer were fair and reasonable. The retailer posted a loss of 903.5 million rand ($53.2 million) for the 26 weeks ended June 26, compared with 358.5 million rand a year earlier. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!