ROGERS, Ark. – As Walmart Stores Inc. expands its international business, the company wants to carry ideas from a South African chain it is buying to other markets, company executives said Thursday.
Walmart’s hotly debated $2.4 billion purchase of a majority interest in Massmart will put Walmart in the building supply business, one of a variety of Massmart store formats.
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The company expects the acquisition to close in June.
Almost all of Massmart’s stores — 263 of them — are in South Africa. But J.P. Suarez, senior vice president of international business development, said the world’s largest retailer intends to expand Massmart’s footprint in southern Africa, where the chain operates in more than a dozen countries as far north as Ghana and Nigeria.
One priority is to offer more refrigerated food, a category lacking among Massmart and its competitors, Suarez said.
“It’s going to be a real win for the customer. It’s something Walmart has a great expertise in,” said Cathy Smith, Walmart’s international chief financial officer.
The Massmart acquisition give Walmart access to 50 million new customers.
Walmart International CEO Doug McMillon said the company can expand in Africa as it has in Latin America, serving middle-class customers but also reaching underserved lower-income shoppers.
McMillon said the number of middle-income shoppers is growing in sub-Saharan Africa, as is government stability.
He said the company can help develop manufacturers that ultimately can export some of their products, which will help strengthen both the local economy and Walmart’s customer base.
The South African government’s competition agency approved the deal this week.
Massmart’s home building supply stores will be a new venture for Walmart, which Suarez said may have potential for further development.
“We do want to take that capability and learn and apply it to any other market it might be relevant to,” Suarez said.
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