The world's largest retailer has been hit by weakness in the United States, where low-income shoppers are particularly vulnerable to unemployment and higher petrol prices. It has responded by focusing on cost cuts and international growth.

According to Reuters, buying Massmart would give Wal-Mart a considerable network in Africa's biggest economy and a foothold in 13 other countries in sub-Saharan Africa.

Home to some of the world's fastest growing markets, Africa also boasts an emerging middle class and roughly 1 billion consumers, making it an increasingly attractive target for overseas investors.

"Massmart is a very good fit with their business," said Bryan Roberts, global research director at industry research firm Planet Retail in London.

Other international retailers could eventually bid for one of Massmart's local competitors to tap the potential of sub-Saharan Africa, he said.

"There's no shortage of good businesses that could be acquisition targets -- Shoprite, Woolworths and the like."

Massmart and Wal-Mart said the U.S. company had made a non-binding proposal of 148 rand per Massmart share, valuing it at around 30 billion rand or a premium of nearly 10 percent over Thursday's close of 134.75 rand.