Regional retail giant, Choppies Enterprise Limited this week announced that it has entered into a conditional agreement with Ukwala Supermarkets in Kenya to purchase its ten outlets. The company announced the deal barely ten days after it had entered the Johannesburg Stock Exchange (JSE), Africa’s biggest bourse by value.
The transaction is in line with the company’s strategy of expanding into new markets in Sub Saharan Africa and its stated target of operating over 200 stores across at least six countries by December 2016. The statement released this week states that the transaction provides the Company with an immediate footprint of established stores and a platform from which to grow in Kenya. Three of the supermarkets are located in the country’s capital Nairobi, two in Nakuru and five in the port city of Kisumu, the third largest city in Kenya.
Ukwala is a recognised and well-regarded brand in the Kenyan market and the stores will trade as Choppies Ukwala supermarkets. “Choppies will operate with a 25 percent local partner in Kenya in terms of the joint-venture agreement with the promoters of Export Trading Group, the leading agricultural commodities trading and logistics business, long-established in the region. The supermarkets will be acquired by Choppies Supermarket Kenya Limited, in which the Company holds a 75percent interest,” reads the statement.
“Choppies Supermarket Kenya Limited will buy the assets and the business name for a purchase consideration of approximately US$10 million, subject to final due diligence and inventory valuation. The purchase consideration will be funded with debt and from existing cash resources,” says the statement. The implementation of the transaction is subject to approval of the Competition Authority in Kenya and other relevant regulatory approvals. Choppies recently listed its 1,2 billion shares in Africa’s largest bourse, the Johannesburg Stock Exchange (JSE), in line with its expansion plan into the African continent.