Shoprite, Africa’s largest food retailer, has sold its Nigerian operations to local investors 16 years after it opened its first outlet in the continent’s most populous country.
The company sold its stake to Ketron Investment, a Nigerian company owned by a group of local investors led by property firm Persianas Investment, Ketron said in an emailed statement.
Shoprite is changing its strategy "from an ownership model to a franchise model," Ketron said. The acquisition has been approved by Nigeria’s federal competition and consumer protection commission.
With the sale, Shoprite becomes the latest South African business to exit the West African nation in the last decade. The retailer operated 25 outlets in eight states across Africa’s biggest economy but had been struggling with disruptions. Ketron said it plans to keep open new ones and display more Nigerian-made products.
"We look forward to building an even stronger company following our acquisition"” said Tayo Amusan, Ketron’s chairman.
Shoprite, which operates 2,843 supermarkets in 15 countries, serving 35 million customers in Africa and the Indian Ocean Islands, has struggled with supply-chain disruptions and repatriation of funds - both familiar problems to foreign businesses in the Nigerian market.
Such logjams prompted other South African retailers including Woolworths, Truworths International and Mr Price Group to quit Nigeria.
KPMG Advisory Services, MBO Capital and and law firm Banwo and Ighodalo advised Ketron on the deal, according to the statement.