MASSMART HOLDINGS LIMITED
    (Incorporated in the Republic of South Africa)
    (Registration number 1940/014066/06)
    JSE Ordinary Share code: MSM
    ISIN: ZAE000029534
    ("Massmart")


    WALMART INC.
    (Incorporated in the State of Delaware, United
    States of America)
    Traded on the New York Stock Exchange under
    the symbol "WMT"
    (acting through its indirect wholly-owned
    subsidiary Main Street 830 Proprietary Limited)
    (Registration number 2010/016839/07)
    ("Walmart")



    DETAILED CAUTIONARY ANNOUNCEMENT REGARDING A POTENTIAL OFFER BY
    WALMART TO ACQUIRE ALL THE OUTSTANDING SHARES IN MASSMART THAT IT DOES
    NOT ALREADY OWN, EXCLUDING TREASURY SHARES


Holders of Massmart ordinary shares ("Massmart Shareholders") are hereby advised that the Massmart
board of directors ("Massmart Board") and Walmart have reached in principle agreement regarding the
terms and conditions of a potential offer by Walmart to acquire all of the issued ordinary shares in Massmart
("Ordinary Shares"), other than those Ordinary Shares already indirectly held by Walmart, or any treasury
shareholding subsidiary of Massmart, pursuant to a scheme of arrangement ("Scheme") or a standby
general offer ("Potential Offer"). If the Potential Offer is made and implemented, it would result in the
delisting of all the Ordinary Shares from the main board of the securities exchange operated by the JSE
Limited ("JSE").

The Massmart Board has constituted an independent board ("Massmart Independent Board") comprising
Mr Kuseni Dlamini, Ms Olufunke Ighodaro and Ms Lindiwe Mthimunye to review the terms and conditions
of the Potential Offer. The Massmart Independent Board has appointed PricewaterhouseCoopers
Corporate Finance Proprietary Limited as an independent expert ("Independent Expert") to consider
whether the Potential Offer is fair and reasonable to Massmart Shareholders.

Massmart Shareholders are advised that this announcement does not constitute a firm intention to make
an offer in terms of the Companies Regulations, 2011 and Companies Act No. 71 of 2008 ("Firm Offer").

Salient terms and preliminary recommendation

The salient terms of the Potential Offer include:

▪     a consideration of ZAR62 in cash for each Ordinary Share held by eligible Massmart Shareholders.
      This represents a premium of 53% to the closing share price, a 68.7% premium to the 30-day volume
      weighted average price and a 62.4% premium to the 90-day volume weighted average price as at 26
      August 2022, the day prior to this announcement;

▪     a Scheme to be proposed by the Massmart Board between Massmart and the Massmart Shareholders
      in terms of which Walmart will acquire all of the remaining Ordinary Shares. In the event that the
      Scheme does not become operative for whatever reason, a standby conditional general offer (which
      would run concurrently with the Scheme) would be implemented for the same consideration;

▪     a restructure of the 2013 Massmart employee share plan;

▪     the delisting of Massmart pursuant to the implementation of the Scheme or the standby general offer;
▪   the receipt of requisite regulatory approvals from amongst others the Takeover Regulation Panel
    ("TRP"), the South African Reserve Bank and the JSE; and

▪   other conditions precedent typical of a potential transaction of this nature.

The Independent Expert has considered the Potential Offer and issued a preliminary report that the terms
and conditions are fair and reasonable. The Massmart Independent Board, taking into account the
preliminary report of the Independent Expert, is unanimously of the preliminary view that the terms and
conditions of the Potential Offer are fair and reasonable and intends to recommend to the Massmart Board
to propose the Scheme and support the standby general offer.

Rationale for the Potential Offer

Massmart released its interim results for the period ended 26 June 2022 today. The results reflect ongoing
underperformance and the significant headwinds faced by each of the group’s operating businesses.

Walmart acquired control of Massmart in 2010, in what was then a landmark transaction in the South
African consumer landscape. Over the past decade, however, Walmart has had to provide increasing levels
of support across Massmart’s businesses. This support has deepened substantially in the period since the
outbreak of Covid-19 in 2020. During the mandatory national lockdowns in 2020, Walmart injected a
ZAR4 billion facility into Massmart to shore up the group’s liquidity. Walmart subsequently agreed to
restructure half of this facility as equity in terms of International Financial Reporting Standards to shore up
the solvency of the Massmart group.

The management led turnaround strategy launched in 2019 has faced many headwinds, primarily Covid-
19 but also the civil unrest in 2021 which resulted in a loss of operations and disruptions to supply chain
on certain key inventory lines, flooding experienced in parts of the country, weak consumer demand for
general merchandise and an increasingly competitive operating environment. Despite the difficult trading
environment, Massmart management has continued to drive the turnaround plan. The ongoing divestiture
of non-core assets, although crucial to the long-term strategy of Massmart, will have a negative impact on
the profit and loss of Massmart in the short term and will require additional capital investment into the
business. In addition, the implementation of the Massmart’s business plan includes, inter alia, the ongoing
development of its e-commerce strategy, which will require further intervention operationally and significant
additional financial investment.

The Potential Offer will enable Walmart to continue its overweight support as a long term shareholder and
allow eligible Massmart Shareholders the opportunity to realise value now.

Cautionary announcement

Walmart and Massmart have begun engaging Massmart Shareholders regarding the Potential Offer. To
date, support has been received with respect to approximately 11.3% of the Ordinary Shares representing
approximately 24.6% of the outstanding Ordinary Shares. In addition, given the significant churn in
Massmart’s shareholder register, Massmart Shareholders with whom Walmart and Massmart have been
unable to engage with to date, will now have the opportunity to consider the Potential Offer.

The making of a Firm Offer is subject to the execution of the transaction documentation, final approvals by
the Massmart Board and Walmart and the approval of the Firm Offer by the TRP.

Massmart Shareholders are advised that whilst the discussions between Walmart and Massmart are at an
advanced stage there is no certainty that a Firm Offer will ultimately be made. Accordingly, Massmart
Shareholders are advised to exercise caution when dealing in the Massmart’s securities until a further
announcement in this regard is made.
Responsibility statements

The Massmart Board and Massmart Independent Board collectively and individually accept responsibility
for the information contained in this announcement and certify that, to the best of their knowledge and
belief, the information contained in this announcement relating to Massmart is true and this announcement
does not omit anything that is likely to affect the importance of such information.

Walmart accepts responsibility for the information contained in this announcement and certifies that, to the
best of its knowledge and belief, the information contained in this announcement relating to Walmart is true
and this announcement does not omit anything that is likely to affect the importance of such information.

Johannesburg
29 August 2022

Financial Advisor and Transaction Sponsor to Massmart

The Standard Bank of South Africa Limited

Legal Advisor to Massmart

ENSafrica

Financial Advisor to Walmart

Goldman Sachs International

Legal Advisor to Walmart

Webber Wentzel

Independent Expert to Massmart

PricewaterhouseCoopers Corporate Finance Proprietary Limited