South Africa’s Steinhoff’s and grocery retailer Shoprite have called off a potential deal to create an African retail giant.
In a joint statement, the two firms said “the fact that the relevant parties could not reach an agreement in respect of the Share Exchange resulted in the negotiations being terminated.”
As a result both companies saw a notable increase in their respective stock prices with Steinhoff’s shares in Johannesburg rising more than 7% since the announcement, while Shoprite’s stock jumped more than 6%.
The deal was the idea of retail magnate Christo Wiese, who owns 16% of Shoprite and 23% of Steinhoff, and would have given Steinhoff a major interest in the R110-billion Shoprite.
According to the Global Powers of Retailing list published in Janaury 2017, Steinhoff International, a manufacturer and retailer of mostly furniture and household goods, is currently the biggest retailer in the country and 72nd in the world.
Shoprite Holdings is the second biggest retail brand in the country, ranked 110th.