Pepkor makes retail investment in Brazil in what experts call a good strategic move

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While the value of the deal was not disclosed, Pepkor said the acquisition of the group was less than 4% of its market capitalisation, which on Thursday was about R80bn.

Pep's purchase of an 87% interest in Brazilian value retailer Avenida has been welcomed by market analysts as a good strategic move. Picture: WALDO SWIEGERSJSE-listed Pepkor’s move into Brazil with the acquisition of an 87% interest in value retailer Avenida there has been welcomed by market analysts as a good strategic move that also retains the expertise of the founders of that business.

Makwe Masilela, who leads Makwe Fund Managers, viewed the transaction as a “strategic move by Pepkor and very wise”. “And Avenida has only 130 stores, so for Pepkor this will pay off if their whole intention is to expand into South America using this as a base. “Another thing is that Brazil is another emerging market. It’s not Australia or anywhere in Europe so there are clear synergies compared to the usual places South African companies want to step out to expand into,” said Kunze.

 

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