Wal-Mart Aims for South Africa: Anticipating Corporate Expansion
By Chris on October 1, 2010
One of the new features we announced recently was the capability to conduct co-entity searches in Recorded Future. The public announcement of Wal-Mart’s play for South Africa-based Massmart provides a great opportunity to look at how such queries could be effective in picking out rumors and trends in the build up to corporate growth as well as related M&A events.
It’s especially interesting to watch Wal-mart’s international moves as according to its latest quarterly filing (Form 10-Q), the company’s international sales grew by over 15% compared with the same 6-month period last year. Meanwhile, its U.S. sales remained relatively flat. Walmart’s international division now accounts for a full quarter of their sales, obviously representing a significant international push for the company.
In our research for events related to both Wal-Mart and South Africa over the course of 2010, a clear spike can be seen in momentum at the end of September. In the timeline below, it’s the cluster of event indicators to the right of the pop-up bubble driven by the formal announcement of Wal-Mart’s bid this week.
However, the tip-offs for this particular acquisition attempt go way back to April, where you can see chatter around Wal-Mart making a move into the African market.
Beyond looking back at early indicators of the acquisition, we can also set up a query to look at the wealth of conversation that has emerged since the announcement. Looking back, Massmart was not the only suspect, as a July report from AllAfrica.com discussed the impact that Wal-Mart’s arrival could have on the local chains.
There’s already been plenty more speculation this week on effects from Wal-Mart’s landing in the region, and there is sure to be more as the bid moves forward regardless of whether it’s successful or not.
Looking beyond just references to Wal-Mart’s expansion, and specifically for quotations about the deal, reveals a number of interesting points.
One, Wal-Mart has already been considering the influence of labor unions in South Africa. Two, the South African market is seen by the company as a jumping off point to the African market at-large, which is clearly in following with its expanding global sales efforts noted above.
So, related to the above issue of labor unions, one of the things that might be of interest when scoping out the proposed deal would be looking at the stability of Massmart in recent months. Conducting a search for Massmart “Accounting and Restructuring” events, which would include any labor or legal issues, in 2010 shows some intriguing news.
Just months ago, it seems the company had to repel allegations of a Wal-Mart takeover bid after laying off workers and facing a labor strike.
How would one keep tabs on such an event using Recorded Future news analytics? One approach might be to set a search for a future period of time, in the case below I’ve used “Rest of the year,” and seek out “Corporate Growth” or “M&A and Alliances” event occurrences.
The network below highlights companies as orange nodes that have some tie to the above listed events in South Africa through the end of the year:
We’ll be following along here to see what comes of the Wal-Mart acquisition of Massmart, and keeping an eye on the what major international players might follow Wal-Mart’s lead into the African market.
Below is also a look at the compilation of query strings used in this post, all neatly compiled in a Recorded Future Workbook.
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