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HomeBusinessShoprites bid to acquire some Massmart stores approved

Shoprites bid to acquire some Massmart stores approved

The Competition Tribunal has approved Africa’s largest retailer Shoprite to acquire some stores including wholesale and retail liquor stores belonging to Massmart.

The approval, however, excludes 10 grocery stores under the Cambridge and Rhino Cash and Carry brands which the tribunal identified as “highly problematic”.

Shoprite will acquire 42 Cambridge Food and Rhino Cash and Carry stores – the majority of which will include adjacent liquor stores – two Fruitspot facilities, the Massfresh Meat business and 12 Masscash Cash and Carry stores.

Last year, Shoprite offered Massmart, the owner of Game and Makro over R1.3 billion to buy 56 Cambridge Food and Rhino Cash and Carry and over 40 liquor outlets.

The tribunal’s approval follows a three-day merger hearing that included the retailers competitors Pick n Pay and Spar who acted as intervenors.

The hearing also included the South African Commercial Catering and Allied Workers Union (SACCAWU).

Stringent conditions.

The deal comes with some stringent conditions.

The tribunals strict conditions for approving the merger includes several public interest-focused conditions relating to employment, equitable ownership, support of local small businesses and skills development.

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“There will be no retrenchments as a result of the merger since all employees of the stores that are being disposed of by Massmart to Shoprite will be transferred to the Shoprite Group. In addition, Shoprite Group undertakes to create additional permanent employment opportunities at its local operations.”

Greater spread of ownership

“The Shoprite Group will establish and implement the Employee Share Ownership Programme (ESOP) within 60 days of the merger implementation date. The ESOP will hold 40 million shares in Shoprite and employees’ participation will be by way of holding units, at no cost,” the tribunal said.

Skills development

The tribunal said the retailer will enroll additional students in its SMMEs mentorship programme and the Government’s YES programme.

This is a joint initiative by the private sector and government that aims to help the youth to gain work experience through employment placements.

“The Shoprite Group will also contribute a minimum specified amount to the Shoprite Academy annually, to enhance internal training and skills development within the Shoprite Group,” it said.

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