Johannesburg Stock Exchange-listed retail giant Pepkor has received the greenlight from South Africa’s Competition Commission (CompCom) to acquire five retail store brands – Legit, Style, Boardmans, Swagga, and Beaver Canoe – from the unlisted Durban-based group Retailability.
The CompCom confirmed the decision in a statement yesterday.
It follows Pepkor and Retailability announcing the approximately R1.9-billion cash deal in March, which would include around 462 stores (within the five brands) across South Africa, Botswana, Lesotho, Namibia and Eswatini.
The CompCom said it “recommended that the Competition Tribunal approves the proposed transaction whereby Pepkor Trading intends to acquire the target businesses [the five brands]”.
“The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market,” it noted.
However, its greenlight comes with conditions.
“To address public interest concerns, the acquiring firm [Pepkor Trading] will employ the target businesses’ employees on terms and conditions that are no less favourable than the current employment terms and conditions,” the CompCom said.
“In addition, the acquiring firm shall not retrench any employees of the target businesses because of the merger.
“Lastly, the merged entity has also undertaken to maintain or increase the proportion of local procurement from small to medium enterprises and providers that are owned by historically disadvantaged persons,” it added.
When Pepkor and Retailability announced the deal earlier this year, the companies noted that the Edgars, Edgars Beauty, Red Square, Kelso and Keedo businesses “are not included in the proposed transaction and will continue to be operated by Retailability”.
– MoneyWeb
