Wal-Mart Stores Inc. (NYSE: WMT) wanted to buy South Africa’s Massmart chain for about $4.6 billion in 2010. The chain countered with an offer for Walmart to buy 51% for about $2 billion, an offer that Walmart accepted. It’s a good thing for the world’s largest retailer.
Deutsche Bank AG (NYSE: DB) just lowered its rating on Massmart, which trades on the Johannesburg exchange, from ‘hold’ to ‘sell’. Bloomberg News reports that DB made the change on the basis of concerns about near-term earnings from “potentially aggressive discounting to pursue market share” and “the potential drag on earnings from a significant investment in supply chain and organic growth.”
Walmart shares are trading down about -0.5% at $59.19 in a 52-week range of $48.31-$61.06.
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