(BENTONVILLE, Ark.) -- Walmart seeks to broaden its international reach, as the company announced Monday that it has offered to purchase 51% of the shares of Massmart Holdings of South Africa.
The company issued a statement saying the offer -- at 148 rand a share, representing a 19.2% premium to the 30-day weighted average price on September 23 -- has been unanimously recommended by Massmart’s board of directors. The total offer is for 16.5 billion rand, or 2.34 billion U.S. dollars.
“We continue to be excited by the opportunity to invest in Massmart's business and to accelerate its growth and expansion in South Africa,” said Doug McMillon, President and CEO of Walmart International.
McMillon said the combination fits well with the corporation’s strategy of being able to enter high growth markets where it can use its global expertise and generate strong returns. Walmart also hopes to be able to connect small farmers with its global supply chain, and thus increase farmer income and improve the quality of their produce.
The Wall Street Journal reports that several labor unions have objected to the proposed combination, saying that Walmart is guilty of poor labor relations and that its entry to South Africa will hurt suppliers.
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