Deacons, woolworths finalise joint venture

A sales lady at a Mr Price outlet in Nairobi.  Deacons owns and manages Woolworths, Truworths, Identity, 4U2, Mr Price, Angelo, Adidas, Life Fitness and babyshop. [PHOTO: COURTESY]

By John Oyuke

Deacons Kenya Limited has finalised the terms of its future business relationship with Woolworths Group of South Africa.

The completion of joint venture agreement concerning Woolworths retailing business in Kenya is set to be approved by shareholders during an Extraordinary General Meeting (EGM) set to be held on January 31 in Nairobi.

Creation of the joint-venture – to be known as Woolworths Kenya Proprietary Ltd – is also subject to receipt of all relevant approvals by the regulatory authorities.

In a notice yesterday, Deacons said that its retail business, which has been trading as “woolworths” in Kenya, will be transferred to the new company, which will carry on the business under the same name, on or about April 1.

All debts

The new firm will also be responsible for all debts and liabilities in respect of the business up to the date of transfer.

“The transferee (Woolworths Kenya Proprietary Ltd) is not assuming nor is it intended to assume any liabilities whatsoever incurred by the transferrer (Deacons) in the business up to the date of transfer,” it said.

Likewise Deacons will receive all debts and liabilities owed and due to it up to and including the date of the transfer.

Deacons Kenya Ltd is the umbrella company, which owns and manages various internationally acclaimed retail brands in Kenya, Uganda and Rwanda. These brands comprise of Woolworths, Truworths, Identity, 4U2, Mr Price, Angelo, Adidas, Life Fitness and babyshop.

According to the EGM notice, shareholders will authorise the completion of the sale and transfer of the Woolworths franchised business that is currently operated by Deacons to Woolworths Kenya Proprietary Limited (Woolworths Kenya).

The shareholders will also approve the allotment of 51 per cent of the shares in Woolworths Kenya to Woolworths Holdings Mauritius Limited (Woolworths Mauritius), such that Woolworths Kenya will become an associated company to Deacons.

New plan

Woolworths Kenya Proprietary Limited will be operated on a joint venture basis between Deacons and Woolworths Mauritius.

The deal will see Woolworths continue in its eradication of its previously used franchise business model and turn to partnership-based deals in line with its increasingly visible strategy and expansion across the continent.

 “By moving into a partnership model, we are going to be getting more involved in the retail side of the operations,” John Fraser, Woolworths’ executive for international business told journalists last year.