From BusinessDaily

Kenya’s largest retail chain Nakumatt is set to acquire three stores belonging to South Africa’s Shoprite in Tanzania in a multi-billion-shilling deal that is expected to be completed by March next year.

The acquisition gives Nakumatt a bigger presence in Tanzania where it debuted in December 2011 with the 34,000-square feet Nakumatt Moshi outlet.

The deal involves the takeover of three Shoprite outlets — one in Arusha and two in Dar es Salam  —  and is valued at Sh4 billion.

“We have been informed of the said takeover by Nakumatt and the whole deal is set to be concluded March next year,” a senior Shoprite manager in Arusha told the Business Daily on the phone.

But Nakumatt Holdings managing director Atul Shah sought to play down reports of a deal involving the two retail chains.

“There is no news on this, will let you know if anything like this develops,” Mr Shah said in an email response to inquiries by the Business Daily.

The impending acquisition marks the latest phase of cross-border expansion by a Kenyan retailer.

Like Nakumatt, Kenya’s second-largest retail chain Uchumi Supermarkets has a regional presence with outlets in Uganda and Tanzania besides cross-listing at the Kigali Securities Exchange in Rwanda.

Shoprite opened its first shop in Tanzania in 2001 and its exit comes a few months after the Tanzanian government warned it against rampant importation of products from South Africa.

“Shoprite was importing up to 80 per cent of its products from South Africa – a move that was clearly aimed at promoting manufacturers back home and it seems the Tanzanian government warning did not go well with them causing the exit,” said another source familiar with Shoprite’s operations.

It is this change in regulatory environment that has seen Nakumatt move to acquire Shoprite stores, increasing its Tanzanian footprint to four outlets.

Shoprite Group of Companies is one of Africa’s largest food retailers. It operates 1,334 corporate and 406 franchise outlets in 17 countries across the continent and the Indian Ocean Islands.

Shoprite was previously the biggest retailer in Tanzania ahead of rivals such as Shreejis Supermarket, Shoppers Supermarket and the high-end Village Supermarkets.

Nakumatt, which runs 35 stores in East Africa including Rwanda and Uganda, has crafted an ambitious expansion plan that should see it venture into more African markets in the medium term.

Written by Simon Ciuri | Read more at BusinessDaily