Walmart will be big in Africa

Walmart will soon be big in Africa.

The $2.4 billion deal for the world's largest retailer to buy controlling shares in South Africa's Massmart chain came a big step closer to reality with the approval on Jan. 17 by South African shareholders. Massmart hopes the deal will be completed by the end of March.

This will be Walmart's first entry into sub-Saharan Africa but it is expected to quickly make its mark with its low price/high volume sales. Massmart already has operations in 14 African countries and has ambitious plans to expand by opening 150 stores across Africa over the next three years.

The deal has faced opposition from South Africa’s powerful trade unions, which have accused Walmart of not respecting workers’ rights in other countries. Walmart and Massmart have insisted they will continue to honour all existing union agreements and South African labour laws.

The acquisition has to be approved by South Africa’s competition authorities. But analysts said they saw no hurdles to prevent the deal being completed.

Walmart had originally planned to purchase all Massmart shares for $4.6 billion but scaled back its offer in order for the South African company to retain exposure to Massmart, which will remain listed on the Johannesburg Stock Exchange.