Supplier development funds as merger remedies : an ex-post review of the Walmart-Massmart merger remedies

Abstract

The purpose of this research was to conduct an ex-post review of the Walmart-Massmart merger remedy, focusing on the impact of the supplier development fund on the SMMEs it supported. The research also considered the impact of the supplier development fund on Walmart-Massmart as the buying firm as well as the use of a panel of experts in designing the fund and how this affected the outcomes achieved. This qualitative research was conducted as a single-sample case study. Interviews were conducted with a representative of Walmart-Massmart, some of the suppliers who participated in the fund, and one of the experts who was on the panel of experts used by the Competition Appeals Court. The research found that the supplier development fund assisted the suppliers with funding for capital expenditure, working capital, access to markets, improved governance and operational efficiencies. As a result, the suppliers grew and were able to hire more employees. The research also found a positive benefit for Walmart-Massmart. Finally, the research found that the panel of experts played a critical role in the design and development of the fund which was important given that this was the first condition of its kind in South Africa.