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Wal-Mart tapping South Africa market

Wal-Mart Stores Inc. will gain a major foothold into the South African market by gaining a 51 percent stake in retailer Massmart. (Associated Press)
Wal-Mart Stores Inc. will gain a major foothold into the South African market by gaining a 51 percent stake in retailer Massmart. (Associated Press)

Wal-Mart Stores Inc. is buying a 51 percent stake in South African retailer Massmart. The transaction, worth about $2 billion, will cost Wal-Mart $20.71 per share.

• OVERSEAS AGENDA: The Massmart deal gives Wal-Mart access to South Africa’s fast-growing economy at a time when U.S. sales are sluggish.

• REACTION: The deal was met with some concerns from unions and major stockholders in South Africa, but by taking a smaller stake than initially planned, Massmart was able to retain its Johannesburg exchange listing. That allowed investors to keep their stakes. Wal-Mart has said it would respect any existing union contracts.