Wal-Mart in talks to buy South Africa's Massmart

image captionWal-Mart is expanding into emerging markets

Wal-Mart, the world's largest retailer, is in talks to buy South African wholesaler Massmart in a deal worth more than $4bn.

Wal-Mart has tabled an offer of 148 rand a share, which values Massmart at about 30bn rand ($4.1bn; £2.7bn)

Declining sales in the US have led to Wal-Mart pushing into emerging markets to maintain growth.

Strong sales in China, Brazil and Mexico helped it to record a second-quarter profit of $3.6bn in 2010.

A firm foothold in Africa would see Wal-Mart add to its expansion plans.

"South Africa presents a compelling growth opportunity for Wal-Mart and offers a platform for growth and expansion in other African countries," said Andy Bond, executive vice-president of Wal-Mart for the region.

Massmart's company website lists a total of 232 stores in South Africa alone, with 24 distributed throughout the continent, extending as far as Nigeria.

Wal-Mart's moves into other territories have sometimes brought it into conflict with local trade unions, but the company was keen to allay fears that the pattern would be repeated in South Africa.

"We respect and honor pre-existing union relationships and are committed to abiding by South African labour laws," said Doug McMillon, president and chief executive of Wal-Mart International, on the company website.

Shares in Massmart rose 10.5% to 149 rand (£13.40) in Monday morning trading.

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