WalMart takeover of Massmart to be announced

Almost everyone that I have chatted to about the WalMart 51 percent purchase of Massmart has agreed that there has been serious regulatory overreach. But then again, all the people I chat to do not have a socialist agenda, nor do they live in a world clouded by ideology. Fact, WalMart employs more people in the US than any other organisation. The next biggest employer in the US is the postal service, which employs around 570 thousand folks. And postal service has been losing money as 44 cents for a letter just doesn't make sense anymore. I mean, you can post a letter from the Mexican border to the Alaskan wilderness for 44 US cents. Just been reading a Bloomberg Newsweek feature and they make that point.

Anyhows, socialists and postal workers aside, the real benefits of having an international competitor here of size and scale will only be felt once they pay 51 percent of the shareholders real money. Real value that has been created by Mark Lamberti and Grant Pattison and the rest of the board over the period that the two have presided of the group, for shareholders of the company. Some Oliver Twists might think the price is not enough, but 25 times historic earnings is a very generous price. The analyst community suggest that the current price is trading at 14.3x 2013 earnings. Still rich I guess. Attaching all sorts of conditions to the deal about restrictions this and you must that.

Let me make these points clear, points I have had about the line of questioning all along.

Income equality in South Africa is still very high, unacceptably high.

Paying social grants means we care about the poorest of the poor and needy in our society.

14 million people benefit from the social security net in this country, it might seem very little, but a little is better than zero.

Low prices leads to low inflation, which means that rates stay low. Inflation is the scourge of the poor, it does not necessarily impact rich people.

Those points amongst many others not made is what I wanted to make. I hope that sense prevails and that WalMart are given the green light without too many conditions that would cause the global giant to walk away. Last point, we are making it too hard for businesses to invest in South Africa. Investment in South African businesses create jobs, not the opposite. Cheaper prices benefits broader society. Consumers who then have more money in their pockets to either spend or to invest, both of which are good for us as a country. If the opposite were to happen, WalMart walking away, I can assure you that folks thinking about making investments here will walk away. And that would be really bad for all of us. Time to get real about the global village.