COSATU has today, 13 May 2011, submitted the following Section77 Notice on Walmart-Massmart Merger
1. Introduction
1.1 The Congress of South African Trade Unions (COSATU) notes the bid by Wal-Mart Stores Inc. ("Wal-Mart") to acquire 51% of South Africa's major retail company, Massmart Holdings Ltd ("Massmart"). The Massmart shareholders on 17 January 2011 voted in favour of the merger; despite impassioned pleas from various stakeholders for the rejection of the merger bid.
1.2 Stakeholders, including COSATU affiliated unions, South African Commercial, Catering and Allied Workers Union (SACCAWU), Southern African Clothing and Textiles Union (SACTWU), Food and Allied Workers Union (FAWU) and National Union of Metal Workers of South Africa (NUMSA), made submissions to the Competition Commission to ask the Commission to recommend to the Competition Tribunal to prohibit the merger based largely on public interest grounds and on competition grounds
1.3 Again, to the dismay of the stakeholders, on 11 February 2011 the Commission recommended that the Tribunal approve the merger without conditions as "the merger did not raise competition concerns". The Commission was satisfied that the public interest concerns raised by various stakeholders would be resolved through a facilitation process undertaken by the Department of Economic Development with the merging parties and the unions. No agreement has since been reached.
1.4 Given these developments, COSATU is forced to file a Section 77 Notice, in terms of the Labour Relations Act 89 of 1995 as amended. The filing of this Section 77 Notice represent our intention to embark on a protest action should the Tribunal approve the merger or approve the merger without imposing conditions to protect the concerns raised by unions participating in the hearing before the Tribunal.