Johannesburg - Furniture
retailer Steinhoff International is in talks with Shoprite to combine both firm's
African retail businesses.
Reuters reports that, as part of the transaction, Shoprite is expected to buy
Steinhoff's African operations, which include Pepkor Africa, JD
Group, Steinbuild and Tekkie Town.
In a statement,
the companies say the largest shareholders in both entities, the Public
Investment Corporation and Titan Premier Investments – which is controlled by billionaire
Christo Wiese’s family trust – initiated the talks.
The aim is to
establish a “diversified African retail business of significant scale and
international geographical reach that could be regarded as the retail champion
of Africa”.
The deal is set
to be paid for through an equity swap.
Read also: Wiese: Steinhoff, Shoprite tie-up 'natural'
From Shoprite’s
perspective, the deal is expected to position the combined businesses of Retail
Africa as the leading multi-format discount retailer on the African continent.
“As the largest
retailer in Africa, Retail Africa will employ approximately 186 000 people.” It
is expected to turnover R200 billion a year.
Steinhoff has
also agreed to acquire the PIC and Titan’s shares in Shoprite.