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UPDATE 1-S.Africa union may strike over Wal-Mart, Massmart deal

Published 11/04/2010, 11:36 AM
Updated 11/04/2010, 11:40 AM

* Unions forms coalition against Wal-Mart

* Plans to ask top shareholder to reject deal

* Sends 15 demands to Massmart's CEO

(Adds details, shares, background)

By Tiisetso Motsoeneng

JOHANNESBURG, Nov 4 (Reuters) - South Africa's service industry union will not rule out the possibility of a strike against Massmart if U.S. firm Wal-Mart acquires a stake in the retailer, an official said on Thursday.

Wal-Mart is looking to buy more than a 50 percent stake in the discount retailer, which would give it a big presence in Africa's largest economy and a springboard into the fast-growing continent. But Wal-Mart, which has long battled with organised labour in the United States, could see its investment sour if it fails to tame unions with close ties to government which are already gunning for the retail giant.

"We can't rule out the possibility of the strike," Mduduzi Mbongwe, deputy general secretary of the South African Commercial, Catering and Allied Workers Union (SACCAWU) said, at a news conference.

The union, representing more than 150,000 workers in the retail and catering industries, this week formed an "Anti-Walmart Coalition".

Mike Abrahams, a SACCAWU spokesman, told Reuters that the coalition planned to ask civil service unions to put pressure on a major Massmart shareholder, the Public Investment Corporation (PIC), to reject any offer that would hurt workers' rights.

The PIC is a government pension fund and it is the biggest shareholder of the firm in South Africa.

"We know the PIC has to balance out what's right for shareholders, but the coalition would cooperate with public services unions to ensure workers rights are not compromised," Abrahams said.

The union sent 15 demands to the chief executive officer of Massmart, Grant Pattison, relating to the Wal-Mart offer. The demands include keeping employment terms and agreements in place after the takeover and extending them to all Wal-Mart's stores across the world.

Shares in Massmart were 0.11 percent lower at 143 rand by 1403GMT, well below Wal-Mart's potential offer price of 148 rand per share. (Editing by David Dolan and Jon Loades-Carter)

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