Can Wal-Mart make it in Africa?

FOUR billion dollars doesn’t count as an “every day low price”, but Wal-Mart, the world’s biggest retailer, hopes it has found a bargain. That is how much ($4.1 billion to be precise) the Arkansas-based “Beast of Bentonville” has offered to acquire Massmart, a retailer with 288 stores in 14 countries in sub-Saharan Africa. On September 27th Massmart’s management confirmed it is in exclusive negotiations to sell the South African-based firm to Wal-Mart. The deal is being overseen by Andy Bond (pictured right), who ran Wal-Mart’s British arm, Asda. As Massmart’s shares initially traded above the offer price, it suggests some investors think there may be other bidders, and that Mr Bond might have to come up with some more money to clinch the deal.

This is the clearest sign yet that Africa is now near the top of the agenda for the world’s leading businesses. The continent still has its problems, but it is no longer “hopeless”—as this newspaper once described it—especially for anyone wanting to be part of a fast-growing consumer market. Last year, while the global economy struggled with the aftermath of the financial crisis, Africa as a whole continued to advance and is expected to grow by at least 4.3% this year. Some economies, such as Nigeria and Ghana, are racing ahead. As the middle class and urban working class expand rapidly, food consumption is expected to grow strongly, along with sales of other consumer products. …