SA says Wal-Mart's supplier fund not enough
SOUTH AFRICA
Published 02 Aug 2011
Wal-Mart's planned R100-million to develop South African local manufacturers is not enough, South Africa's government said on Tuesday, a sign the country may want bigger concessions from the world's top retailer.
While legal experts have said the government has little legal room to overturn a completed transaction, it was not immediately clear if South Africa could re-negotiate conditions of the deal.
South Africa's anti-trust regulator approved Wal-Mart's $2.4-billion bid for control of local retailer Massmart in May with minimal conditions that include the creation of a R100-million to develop local suppliers.
The three government departments that have appealed the transactions, said on Tuesday the fund was not sufficient to offset Wal-Mart's impact on Africa's largest economy.
"A R100-million supplier development fund could pale into insignificance given the likely impact of substantial shift to imports by the merged entity," the departments of economic development, trade and industry and forestry and fisheries said in a joint statement.
The government wants Wal-Mart to increase the fund to R500-million, Business Report newspaper said last week, citing a government source.
Wal-Mart and Massmart have said the current appeals will have no impact their on-going implementation of the transaction.
The deal has been seen as a test for foreign investment in Africa's biggest economy, which is home to both the continent's most developed economy and some of its most militant labour unions.
Edited by: Reuters
No comments:
Post a Comment