JOHANNESBURG, Feb 17 (Reuters) – South Africa’s Competition Tribunal approved on Wednesday retailer Massmart’s deal to sell eight stores to unlisted Johannesburg-based Devland Cash and Carry, saving 640 jobs.
The approval moves Massmart, majority-owned by U.S. retail giant Walmart Inc, a step closer to completing its turnaround plan, which aims to improve efficiencies, save costs and address underperforming stores.
Last year in January Massmart announced its intention to potentially close 11 underperforming “masscash” stores – its cash and carry format – but later identified a potential buyer for eight of the 11 stores.
The ‘masscash’ division comprises Jumbo cash and carry wholesaler, Cambridge Food and Rhino cash and carry stores.
The Competition Tribunal, which makes the final ruling on mergers and deals, approved the deal on condition that no employees will be laid off as a result of the sale for a period of nine months following the transaction’s implementation date.
The potential sale of the remaining three stores is still being contemplated, Massmart said in response to questions.
The retailer has not given the value of the deal.
Devland owns and controls several firms that are active in the retail and wholesale trade of groceries and related products. (Reporting by Nqobile Dludla; Editing by Promit Mukherjee and Emelia Sithole-Matarise)