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Botswana based Choppies Enterprises Ltd has entered into a conditional agreement with Ukwala Supermarkets to acquire the retail chain’s 10 outlets. The transaction is in line with Choppies’s strategy of expanding into new markets in sub-Saharan Africa and its stated target of operating over 200 stores across at least six countries by December 2016.
The deal provides Choppies with an immediate footprint of established stores and a platform to grow in Kenya. Three of the supermarkets are located in Nairobi, two in Nakuru and five in Kisumu. The acquisition will see Ukwala trade as Choppies Ukwala supermarkets.
Choppies will operate with a 25 per cent local partner in Kenya in its joint-venture agreement with the promoters of Export Trading Group, an agricultural commodities trading and logistics business.
The supermarkets will be acquired by Choppies Supermarket Kenya Ltd, in which the company holds 75 per cent interest. According to the deal, Choppies Supermarket Kenya Ltd will buy the assets and the business name for about Sh970 million, subject to final due diligence and inventory valuation.
The purchase consideration will be funded with debt and from existing cash resources subject to approval by the Competition Authority in Kenya and other relevant regulatory approvals.
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