S Africa’s Steinhoff International to buy clothing retailer Pepkor for $5.7 bn
26 Nov 2014
South African furniture and household-goods retailer Steinhoff International yesterday struck a deal to buy clothing retailer Pepkor for $5.7 billion in a bid to expand into Africa's growing apparel market.
Under the cash and share deal, Steinhoff will buy a 52.47-per cent stake for 57 rand per share from companies controlled through a family trust by Steinhoff's director Christoffel Wiese, and 37.06 per cent for 15 billion rand in cash and 200 million Steinhoff shares from investment company Brait Mauritius.
It will also buy 2.81 per cent from Pepkor's management giving it a total of 92.34 per cent stake.
Steinhoff said it will fund the cash portion through existing cash resources.
Founded in 1965, Pepkor owns a portfolio of retail chains operating in 16 countries across 3 continents, including Africa, Australia, and Eastern Europe.
The company trades from approximately 1.7 million square metres of retail space employing more than 32 000 people.
Its 12 main retail brands, which includes Pep, Ackermans, Shoe City, John Craig, Best & Less, sells clothing, footwear, apparel, homewares, household goods and cellular products and services are mainly focused on the discount and value market segments.
Pepkor reported revenue of 38.2 billion rand for the financial year ended 30 June 2014.
The combined business will have over 6,000 stores, market cap of around €13.5 billion, and annual sales of €11.3 billion.
Cape Town-based Steinhoff has operations mainly in Europe, including Germany, Switzerland, Poland, Bulgaria, Italy, Spain and others, where it sells furniture and bedding through a number of brands.
