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South Africa's largest union, COSATU, threatened to strike if Wal-Mart Stores Inc. (WMT) doesn't agree to discuss local purchasing agreements following the approval from the Competition Tribunal to buy a 51% stake in South African retailer Massmart, it said Tuesday.

The tribunal approved the proposed $2.4 billion merger but said Wal-Mart and Massmart should continue to recognize the collective bargaining rights of the unions for the next three years; make no retrenchments for the two years following the merger; and, provided a 100 million rand ($14.5 million) fund is sufficient to help local industry, learn about the supply chain process.

The tribunal avoided enforcing local purchasing quotas on the merged entity, which the unions had advocated.

"COSATU has never opposed foreign investment into South Africa, particularly if it leads to the creation of new, decent jobs," the union said. "Walmart however is more likely to destroy jobs, by using its competitive advantage to force its competitors out of business, and destroying South African manufacturing businesses, which will not be able to compete with a flood of cheap imports produced in sweat shops by non-union workers or in developed countries which protect their manufacturers with massive subsidies and tariffs."

The Congress of South African Trade Unions said it will discuss a campaign of mass action, which will take the form of marches, demonstrations, pickets and stay-ways, at its committee meeting in late June.

-By Devon Maylie, Dow Jones Newswires; +27 (11) 783 7848; devon.maylie@dowjones.com