On November 25, South Africa’s Steinhoff International Holdings announced the acquisition of investment holding company Pepkor, where it had consented to a majority stake in cash and shares of about $5.7bn or 62.8bn rand.

The Pepkor deal is reckoned to diversify the Johannesberg-based Steinhoff into apparel and other goods, while broadening its horizon into discount retail too.

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Retailer and manufacturer of furniture and household goods, Steinhoff, focusses on markets in southern Africa, the Pacific Rim and Europe, with most of its revenue acquired from outside South Africa.

Established in 1965, Pepkor operates Pep, Pepco (biggest non-food retailer in Poland) and 10 other retail brands emplying a workforce of 32,000, covering 16 countries in Africa, Eastern Europe and Australia. South Africa alone provides 63% of its revenue. In June-ended fiscal 2014, revenue of 38.2bn rand was posted by Pepkor.

In a statement, Steinhoff announced that the combined company would have documented 156bn rand in revenues for the June-ended fiscal.

Steinhoff will gain 92.3% stake as part of the Pepkor acquisition from companies that are managed by a family trust run by a Steinhoff director Christoffel Wiese, Pepkor’s management and Brait Mauritius — an investment company. Pepkor’s management holds the remaining shares. However, the transaction will be subject to the approval of shareholders and regulator.

Steinhoff’s advisers for the deal are Barclays, Deutsche Bank, Citigroup and Commerzbank, whereas Rand Merchant Bank stands as adviser to Wiese’s companies and Brait.