NEW YORK — Wal-Mart Stores Inc. offered on Monday to buy South African retailer Massmart Holdings Ltd. for about $4.25 billion in a bid to jump-start growth beyond its sluggish US business.
A deal would give the world's largest retailer an opening to expand in South Africa, a fast-growing economy but one that's also troubled by high crime and a 24 percent unemployment rate. It also has a heavily unionized work force.
Wal-Mart has focused on expanding overseas, particularly in emerging markets, but South Africa had not been an area that officials had discussed as a potential opportunity.
"South Africa possesses attractive market dynamics, favorable demographic trends and a growing economy," Executive Vice President Andy Bond said in a statement. Wal-Mart has sourced products there but doesn't have a retail presence, company officials confirmed.
Wal-Mart said it would pay 148 rands ($21.11) per share for Massmart, which has 201.5 million shares outstanding, according to Thomson Reuters. Further details of the proposed deal were not disclosed.
Massmart is Africa's third-largest distributor of consumer goods, the leading retailer of general merchandise, liquor and home improvement equipment and supplies and the leading wholesaler of basic foods. Massmart was founded in 1990 and operates chains including Game and Makro.