Massmart

Massmart Holdings Limited (JSE: MSM) is a South African firm that owns local brands such as Game, Makro, Builder's Warehouse and CBW. It is the second-largest distributor of consumer goods in Africa, the largest retailer of general merchandise, liquor and home improvement equipment and wholesaler of basic foods.[1] As of 31 October 2020, Massmart operated 422 stores in South Africa and 12 other Sub-Saharan countries.[2] Its head offices are in the Massmart House in Sandton, Johannesburg.

Massmart
TypePublic subsidiary
(JSE: MSM)
IndustryRetail
Founded1990 (1990)
FounderMark Lamberti[3]
Headquarters
Sandton
,
South Africa
Number of locations
422 (31 October 2020)[2]
Area served
Sub-Saharan Africa
ProductsFood, Liquor, General merchandise, Home Improvement
Revenue R91.564 billion (2016)[4]:40
R2.603 billion (2016)[4]:40
R1.322 billion (2016)[4]:40
Total assets R31.883 billion (2016)[4]:43
Total equity R6.183 billion (2016)[4]:43
Number of employees
45,000+ (2015)
ParentWalmart (2011–present)
DivisionsMassdiscounters, Masswarehouse, Masscash, Massmart
SubsidiariesMakro
Game
Builder's Superstores
CBW
Websitewww.massmart.co.za

History

Massmart was founded in 1990, beginning with the acquisition of six Makro stores. It listed on the JSE Limited on 4 July 2000 at R12.50 per share. Since its founding, Massmart has grown both organically and by acquisition. The firm acquisition history includes:

  • 378 Shield members in March 1992
  • 20 Dion stores in May 1993
  • 14 CCW stores in June 1998
  • 26 Game stores in July 1998
  • 6 Jumbo stores in April 2001
  • 22 Browns and Weirs stores in July 2002
  • 8 Builders Warehouse stores in February 2003
  • 3 De Lay Rey stores, 14 Servistar stores, and 34 Federated Timber stores in June 2005
  • 6 Cambridge Food stores in December 2008
  • 3 Buildrite stores in June 2009
  • Fruitspot (wholesaler of fresh fruits and vegetables) was acquired in January 2012
  • Rhino Cash & Carry Group in March 2012

Divisions
A Makro store in Milnerton, Cape Town.

Massmart's stores are organized into 4 divisions. The stores included in each division are as follows:

  • Massdiscounters
    • DionWired (operates in South Africa)
    • Game (operates in South Africa, Botswana, Ghana, Malawi, Mozambique, Namibia, Nigeria, Tanzania, Uganda, Zambia and Kenya - beginning May 2015[5])
  • Masswarehouse
    • Makro (operates in South Africa, two stores in Zimbabwe were sold in fiscal year 2011)
    • The Fruitspot (operates in South Africa)
  • Massbuild
    • Builders Warehouse (operates in South Africa, Botswana, Zambia and Mozambique)
    • Builders Express (operates in South Africa)
    • Builders Trade Depot (operates in South Africa and Mozambique)
    • Builders Superstore (operates in South Africa)
    • Kangela (operates in Mozambique)
  • Masscash
    • CBW (operates in South Africa, Botswana, Lesotho, Mozambique, Namibia, and Swaziland)
    • Jumbo Cash and Carry(operates in South Africa and Botswana)
    • Trident (operates in Botswana)
    • Cambridge Food (operates in South Africa)
    • Shield (operates in South Africa, Botswana, Lesotho, Namibia, and Swaziland)

Walmart acquisition

In November 2010, Walmart, the American super chain conglomerate made a bid to acquire majority shareholding (51%), in Massmart. At that time, the offer was valued at approximately R:17 billion (approximately US$2.54 billion or £1.54 billion).[6][7] On 18 January 2011, Massmart shareholders voted in favour of Walmart's offer of R148 per share.[7] The South African Competition Commission Tribunal gave its approval of the acquisition of 51% of the firm in May 2011.[8] Shortly thereafter, in June 2011, Walmart completed the purchase of 51% of the company's stock.[9]

In August the South African ministries of trade and industry, economic development and agriculture and fisheries lodged an appeal to the decision of the Competition Tribunal's decision to allow the merger with minimal conditions, this follows an appeal filed earlier by SACCAWU, a local labor union. In March 2012 the appeals court dismissed the case by the governmental ministries, but acknowledged that there were legitimate concerns about the effect of the deal on small producers and employment. The appeals court decision effectively put an end to the legal challenges to the merger.[10]

Major shareholders

Below is the group's largest shareholders as at December 2016:[4]:25

Majority shareholders December 2016 (%)
Walmart52.4
Aberdeen Asset Management PLC21.3
Public Investment Corporation (SA)5.6
Others20.7

References
  1. Massmart, . (2014). "Overview of Massmart". Massmart.co.za. Retrieved 12 February 2015.CS1 maint: numeric names: authors list (link)
  2. "Walmart Investor Relations - Investors - Financial Information - Unit Counts & Square Footage". stock.walmart.com. Retrieved 17 November 2020.
  3. "Imperial taps Massmart founder as CEO". Fin24.com. Reuters. 20 February 2014. Retrieved 7 August 2019.
  4. "Massmart Annual Results 2016" (PDF). 31 December 2016. Retrieved 22 January 2018.
  5. Business Daily Reporter, . (12 February 2015). "Nairobi's Garden City Mall To Open Doors in May". Business Daily Africa (Nairobi). Retrieved 12 February 2015.CS1 maint: numeric names: authors list (link)
  6. Smith, Nicky (29 November 2010). "Wal-Mart Offers 16.5 Billion Rand for 51% of Massmart". Bloomberg News. Retrieved 12 February 2015.
  7. BBC News, . (17 January 2011). "South African Retailer Massmart Backs Sale To Wal-Mart". BBC News. Retrieved 12 February 2015.CS1 maint: numeric names: authors list (link)
  8. BBC Business, . (31 May 2011). "Wal-Mart Cleared To Buy South Africa's Massmart". BBC News. Retrieved 12 February 2015.CS1 maint: numeric names: authors list (link)
  9. Team, Trefis (10 June 2011). "Wal-Mart Takes on Africa With Massmart". Forbes.com. Retrieved 12 February 2015.
  10. Tiisetso Motsoeneng, and Wendell Roelf (9 March 2012). "Wal-Mart Wins Final Go-Ahead for Massmart Deal". Reuters. Retrieved 12 February 2015.
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