Mr Price sticks to its guns in controversial R10 billion European deal

Mr Price is steaming ahead with its planned acquisition of German-based retailer NKD Group in the face of severe shareholder backlash.

Several large Mr Price shareholders have expressed discontent with the deal, with concerns ranging from the valuation, R9.7 billion at the time it was announced, to the viability of a European expansion.

Despite this backlash and a hammering of its share price since the deal was announced, Mr Price is sticking to its guns.

On Friday, 23 January, the retailer informed shareholders that its acquisition continues to make progress regarding the fulfilment of the deal’s relevant conditions.

The only condition left to fulfil is gaining approval under the European Commission’s Foreign Subsidies Regulation. 

Mr Price said the review period for the submission has commenced, and no undue delays are expected.

The retailer also announced that it plans to host an investor presentation on 17 March to provide further insight into its acquisition target and its growth prospects.

Mr Price’s planned acquisition was first announced on 10 December 2025, when the retailer informed shareholders that it plans to acquire 100% of Pegasus Group Holdings, NKD’s retail unit, for around €487 million (R9.7 billion at the time it was announced).

NKD is headquartered in Germany and operates as a cash-based value apparel and homeware retailer.

It has over 2,000 stores across Central and Eastern Europe, with its footprint spanning Germany, Austria, Italy, Croatia, Slovenia, the Czech Republic and Poland.

In announcing its planned acquisition of NKD, Mr Price explained that the European retailer has a clearly differentiated value positioning.

It explained that NKD targets quality and price-conscious customers, with a predominantly private label range offering that serves the whole family and carries minimal fashion risk.

Mr Price compared NKD’s positioning with its own, as both companies operate as cash-based, omni-channel businesses focused on providing fashion and homeware offerings.

This announcement did not go over well with shareholders, with Mr Price’s share price plunging as much as 12% on the day.

Since the deal was announced, major institutional shareholders, including 36ONE Asset Management and Benguela Global Fund Managers, have voiced their dissent.

As a Category 2 transaction, Mr Price’s planned acquisition of NKD does not require shareholder approval to authorise.

However, these large shareholders have written letters to the retailer’s management team outlining their concerns and requesting further information.

Some of their concerns centre around the transaction’s valuation, as R9.7 billion constitutes a significant portion of Mr Price’s market cap, which stood at R50 billion when the deal was announced.

In addition, the shareholders have expressed concerns regarding the viability of a European expansion, given the troubled track record of South African retailers expanding into foreign markets.

36ONE has said it is concerned that NKD’s operations may need to be subsidised by Mr Price’s local operations, which could impact long-term shareholder value.

Despite these shareholder concerns, Mr Price has reaffirmed its commitment to the deal, saying in a follow-up update on 23 December that the company remains excited about the opportunity that NKD presents to the group.