BENTONVILLE, Ark. — Wal-Mart Stores on Monday said it has made a preliminary offer to acquire South African retailer Massmart Holdings for about $4.2 billion.
Massmart, based in Johannesburg, operates 290 stores in 13 African countries, with the majority in South Africa. It operates eight different wholesale and retail chains under several different banners. Its stores offer general merchandise, home improvement equipment and supplies, and Massmart also is "the market-leading retailer of basic foods in the region," Wal-Mart said in a prepared release.
Massmart recently reports a 10% gain in sales for the most recent fiscal year, which ended June 27, to about $6.7 billion (U.S.). Comps were up 2.6%, and earnings were down slightly.
"South Africa presents a compelling growth opportunity for Wal-Mart and offers a platform for growth and expansion in other African countries," said Andy Bond, executive vice president with responsibility for Wal-Mart's operations in the region, including the United Kingdom and Africa. "South Africa possesses attractive market dynamics, favorable demographic trends and a growing economy."
Wal-Mart currently operates about 4,000 stores outside the U.S. in 15 different countries, although it has no stores anywhere in Africa.
Wal-Mart said the talks are in preliminary stages and subject to several contingencies.