9 January 2013

Kenya: Deacons Calls Shareholders to Approve South Africa Deal

Lifestyle and home appliances retailer Deacons has scheduled an extra-ordinary general meeting at the end of this month to approve a deal in which it is seeking a joint venture with South Africa's Woolworths.

The deal gives Woolworths 51 per cent stake while Deacons will retain 49 per cent.

"That subject to receipt of all relevant approvals, Deacons Kenya be authorised to complete the sale and transfer of the Woolworths franchised business currently operated by Deacons to Woolworths Kenya, and to subsequently allot 51 per cent of the shares in Woolworths Kenya to Woolworths Mauritius, such that Woolworths Kenya will become an associated company of Deacons and will be operated on a joint venture basis between Deacons and Woolworths Mauritius," the Deacons' shareholder invitation said.

Deacons has been operating as a Woolworths franchise, through which the South African firm only supplied its brands to shops mostly located in Nairobi.

These brands include Woolworths, Truworths, Identity, 4U2, Mr. Price, Mr. Price Home, Angelo, Adidas, Life Fitness and Babyshop which Deacons trades in its Kenyna, Ugandan and Rwandan stores.

The company has 31 outlets in the East African region. Deacons Kenya will manage the new outfit while Woolworths will continue supplying its brands under a new arrangement.

This will also offer Woolworths a chance to increase its products range in the region to include food, loans, and credit cards in line with its business in South Africa.

The retailer shelved plans to list at the Nairobi Securities Exchange before the end of last year in favour of finalizing the takeover.

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