By Timothy Oyomare
As South African leading grocery retailer exits Nigeria, plans may have been concluded to sell its stake to a Nigerian property firm, Persianas, for $73 million (N30 billion).
According to a person familiar with the deal, Shoprite Holdings Limited has firmed up arrangement to sell its Nigerian division, and there is no going back on the decision.
Regulatory approval for Persianas Group to buy the Shoprite unit is expected by the end of April, said the person, asking not to be identified because the information isn’t yet public. While the asset has been valued by the seller at 30 billion naira ($73 million), it’s not yet clear how much Persianas has agreed to pay.
Cape Town-based Shoprite didn’t immediately comment. Persianas didn’t immediately respond to an email seeking comment and a call to the company didn’t connect.
Shoprite, the owner of South African supermarket chains such as Checkers and U-Save, said last year it planned to exit Nigeria after 15 years operating in the country. The company has struggled with supply-chain disruptions and repatriating funds — both familiar problems to foreign businesses to have targeted the market.
Over the past decade, South African retailers Woolworths Holdings Ltd., Truworths International Ltd. and Mr Price Group Ltd. have all opted to walk away from Nigeria. Even wireless carrier MTN Group Ltd., which has built its Nigeria business into the company’s largest and most profitable and listed it in Lagos, has been caught up in various crises, especially with regulators.
Shoprite has said it will redouble efforts on increasing its dominance over the South Africa grocery sector, where it is by far the market leader.
The Persianas deal was earlier reported by Reuters.
-Bloomberg