Pepkor seals R3 billion Shoprite deal

South Africa’s competition watchdog has approved Pepkor’s acquisition of Shoprite Furniture, with some conditions.

Pepkor is South Africa’s biggest clothing retailer, and owns brands like PEP, Ackermans, Shoe City, Tekkie Town, Refinery, Bradlows, Sleepmasters, Incredible Connection, and HiFi Corp.

Shoprite is South Africa’s largest grocery retailer, and owns the Checkers, Usave, and Checkers Sixty60 brands.

The two retail giants entered into a deal in September 2024 whereby Pepkor would buy Shoprite’s furniture business.

Shoprite Furniture provides homeware, furniture, electrical appliances, insurance products, and financial services to customers from a range of income groups in South Africa and other parts of Africa.

Shoprite CEO Pieter Engelbrecht explained when the deal was announced that the retailer found itself at a crossroads, as the furniture business hamstrung the company’s future growth and profitability.

He said the furniture business required a level of investment that would have resulted in Shoprite redirecting capital and project management resources away from its food retail operations, the retailer’s largest segment.

Therefore, Shoprite decided to sell its furniture business, with Pepkor stepping in as an interested buyer.

Pepkor, South Africa’s biggest clothing retailer, has struggled to scale up its bed, sofa, and appliance business. Therefore, this purchase will help boost its number of stores by a quarter to 1,300. 

Shoprite announced at the time that it would be selling the business to Pepkor for about R3 billion.

On 17 April, the Competition Commission announced that it had approved this deal and said it is unlikely to substantially lessen or prevent competition in any market. 

However, to address public interest concerns, the commission ordered that the merger parties shall not retrench any employees as a result of the merger. 

In addition, it said the merged entity has agreed to maintain or increase procurement from local furniture suppliers.