Investors may fret about its potential for growth in the U.S., but elsewhere in the world, Wal-Mart
The discount-retail behemoth has made a preliminary bid to buy Massmart Holdings, a South African retail chain, for about $4.6 billion. Massmart's positioning fits very well with Wal-Mart's, since it's also a discount retailer that pushes tons of inexpensive merchandise to consumers.
Even more appealingly, this would give Wal-Mart the inside track in getting its gigantic toe into Africa, beating out formidable European retail rivals Tesco
Folks may like the stocks of other discount retailers, but chances are they don't have Wal-Mart's wherewithal to delve into new and potentially very lucrative markets. Sears Holdings
Over the years, Wal-Mart has displayed a good grip on international expansion -- a tricky and risky pursuit, especially when you're one of the first companies moving into a new region.
For Wal-Mart, the deal's $4.6 billion price tag may make this an expensive experiment in international expansion. Nonetheless, shareholders should be gratified that the retail behemoth is trying out new markets for additional growth -- and that it's financially strong enough to take such a gamble in these tough times.
Alyce Lomax does not owns shares of the companies mentioned in this article. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool has a disclosure policy.