Shoprite in major merger move

SHOPRITE and the African operations of Steinhoff are to be merged into a new group called Retail Africa, major shareholders of both retailers, Christo Wiese and the Public Investment Corporation (PIC), announced in midweek.

The deal will result in Shoprite acquiring Steinhoff’s clothing chains, which include Pep, Ackermans, Shoe City and Tekkie Town, in exchange for shares.

Shoprite will also buy the furniture and appliance retailers that Steinhoff owns via JD Group. These include Russells, Bradlows, Rochester, Incredible Connection, Hi-fi Corporation and Sleepmasters.

Furthermore, Shoprite will acquire Steinhoff’s hardware chains Buco, Pennypinchers, Timbercity and Hardware Warehouse.

Retail Africa would be the continent’s largest retailer with an annual turnover of R200-billion, employing 186 000 people, it was noted in Wednesday’s statement.

Steinhoff proposes to acquire Wiese’s Shoprite shares, held in a company called Titan, and the PIC’s in exchange for Steinhoff shares at a ratio still to be agreed.

The deal is likely to trigger a mandatory offer to Shoprite shareholders, who will be offered Steinhoff shares at the same ratio as Wiese and the PIC.

The share price of the target company, Shoprite, jumped 3.2% to R199 while Steinhoff’s fell 5.5% to R71.83 after the announcement.

“It is expected that the proposed transaction will further enhance Retail Africa’s position as an employer of choice,” the statement read. — BDLive