Shoprite Holdings Enters Deal to Purchase Massmart's Food Assets in $89 Million Sale; Pieter Engelbrecht and Mitch Slape Comment
SOUTH AFRICA - Expansion and growth is surely on the brain as Walmart-controlled Massmart prepares to ink a pivotal deal with Shoprite Holdings. The South African-based chain recently announced it is readying to sell its non-core food assets for $89 million (1.36 billion rand) as Shoprite works to strengthen its position in the retail sector.
“The rationale for this transaction is not just premised on the fact that, as a result of our operational expertise, we believe we can profitably run these operations; it also gives us immediate access to opportunities that were on our medium term to-do list,” said Pieter Engelbrecht, Shoprite Group Chief Executive Officer, according to News Chant. “We are well-positioned to integrate and grow these businesses, and as a result, Shoprite can ensure the sustainability of employment of the staff within these businesses.”
Once the deal is complete, Shoprite will gain control of Massmart’s Cambridge Food, Rhino, and Massfresh banners, including The Fruitspot division and 12 Cash & Carry locations. In total, the transaction includes 71 food stores and is expected to close in the first quarter of next year, according to Reuters.
Reuters continued to state that Engelbrecht also teased greater access to opportunities for growth. Shoprite is reportedly South Africa’s largest retailer by market capitalization, and this deal is poised to advance several of its current plans for expansion.
“The sale marks another step in the group’s portfolio optimization process and will, amongst other benefits, free up management time to enable increased focus on leveraging Massmart’s core merchandise and market strengths,” said Massmart Chief Executive Officer Mitch Slape.
As retailers continue to make moves to advance their market share, what other ambitious strategies and agreements will arise in the sector? AndNowUKnow will keep an eye out for the latest.
