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South Africa: Wal-Mart takeover of Massmart cleared by appeals court

Competition Appeal Court rules against application by three government ministers to set aside Wal-Mart's takeover of South Africa's Massmart, but calls for study into how small, local suppliers can benefit.

South africa wal mart massmart 2011 5 31Enlarge
Members of the South Africa Commercial, Catering and Allied Workers Union (SACCAWU) protested on May 9, 2011 outside South Africa's Competition Tribunal in Pretoria, where the anti-trust tribunal hearings into Wal-Mart's proposed takeover of South African retailer. The South African government approved the deal Tuesday, May 31, 2011. (Stringer/AFP/Getty Images)

JOHANNESBURG — A South African court today dismissed a government bid to have Wal-Mart's $2.4 billion takeover of Massmart Holdings set aside, but called for a study into how local suppliers can take part in the American retailing giant's supply chain.

The Competition Appeal Court ruled against the application brought by three government ministers, but upheld a separate union appeal and said that 503 workers fired shortly before the takeover must be reinstated.

South Africa’s anti-trust regulator in May approved Wal-Mart’s bid for 51 percent of Massmart with conditions aimed at protecting jobs. 

The deal sees Wal-Mart gain a foothold on the African continent, with its increasingly important emerging market of consumers.

More from GlobalPost: Attention African shoppers: Wal-Mart is coming

Judge Dennis Davis said in his ruling there was not enough evidence to conclude that job losses from the Wal-Mart-Massmart merger would outweigh benefits to consumers, Business Day reported.

South Africa's economic development minister, Ebrahim Patel, said the government has no immediate plan to contest the ruling, according to Reuters.

UNI Global Union, which represents about 20 million union workers around the world, praised the court's call for a study, saying it "signals that Wal-Mart still has serious questions to answer.

More from GlobalPost: South Africa approves Walmart deal with conditions

http://www.globalpost.com/dispatch/news/regions/africa/south-africa/120309/wal-mart-south-africa-court-decision-massmart-deal