Nov 29 - Wal-Mart made a $2.3 billion formal bid for control of Massmart, giving the world's largest retailer a substantial presence in South Africa and paving the way for further expansion across the fast-growing continent.

Wal-Mart store in New Jersey, USA

Tieing up with Wal-Mart will help discount retailer Massmart speed up its expansion in sub-Saharan Africa and its plan to increase its food retailing business, the South African firm's chief executive said on Monday.

The deal will also likely pit Wal-Mart, which has long battled with organized labor in the United States, against South Africa's powerful trade unions, some of which have threatened to strike against the U.S. firm.

Massmart's chief executive, Grant Pattison, said the company would retain its South African management and local identity after the deal.

"What isn't going to happen is a bunch of Wal-Mart people around here start running the company," he said on a conference call with reporters.

"South African management will continue to manage the business."

The two companies said in a joint statement Wal-Mart will pay 148 rand for a 51 percent stake in the South African discount retailer. That values the deal at 16.5 billion rand ($2.3 billion), Massmart executives said.

Shares of Massmart rose 1.5 percent to 143.75 rand in Johannesburg trade. Wal-Mart's bid, including the price, was first announced in September.

LOCAL PRESSURE

Wal-Mart said in September it was looking to buy up to all of the South African retailer, but scaled the bid back to more than 50 percent last month.

By taking 51 percent of Massmart, Wal-Mart will gain control of the firm and keep it listed in Johannesburg, which may have been critical in getting a go-ahead from South African authorities.

South Africa's government last year scuppered a $24 billion tie-up between local telecom MTN Group and India's Bharti Airtel due to concern that MTN would lose its local listing.

The deputy general secretary of the South African Commercial, Catering and Allied Workers Union (SACCAWU) said this month he could not rule out the possibility of a strike if the deal went through.

The two companies said Wal-Mart has received "irrevocable undertakings" from institutional shareholders holding 35.2 percent of Massmart shares that they would vote in favor of the deal.

In addition it has received non-binding letters of support from shareholders holding about 15 percent of Massmart's shares.

The deal will help Massmart accelerate its expansion in Nigeria, Ghana, Malawi and Uganda, Pattison said, as well as bolster its supply chain in perishable items.


(Reporting by David Dolan; Editing by Jon Loades-Carter)