Give Wal-Mart (NYSE:WMT) credit, in a financial world obsessed with short-term rewards, this massive retailer is not afraid to make long-term investments. While investors will almost certainly continue to pay much more attention to its expansion in China, Brazil and India, Wal-Mart's proposed acquisition of South Africa's Massmart could pay dividends over the long run.
The Details of the Deal
There is no finalized deal between the two companies, but Wal-Mart is proposing to pay about $4.2 billion for this retailer. That represents about a 10% premium for a company that had long been trading on expectations of a bid from foreign operators. In fact, Massmart's stock was trading a bit higher than Wal-Mart's proposed price - suggesting that investors expect some sort of higher bid to materialize.
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