12 December 2010
JSE-listed diversified group Steinhoff International is in exclusive talks with French luxury goods and retail company PPR to acquire the entire issued share capital of Conforama, a leading European retailer of furniture and household goods, for €1.2-billion in cash.
In order to procure the exclusive negotiations with PPR, Steinhoff has secured the support of holders of 53% of its ordinary shares for this transaction.
“Should this transaction be concluded, it will allow us to reinforce our position as one of Europe’s leading integrated furniture and household goods companies by giving us access to key markets such as France, one of Europe’s largest household goods markets, and other territories where Conforama operates,” Steinhoff CEO Markus Jooste said in a statement this week.
“Steinhoff will also continue to support and honour its strategic relationships with retail partners and customers in its traditional territories where it has operated for more than 40 years. Furthermore we will support Conforama in the implementation of its exciting growth plans for the future.”
Strategic opportunity, complementary markets
Conforama is a leading retailer of furniture and household goods, with over 13 000 employees and reported sales of some €3-billion for the 12 months to June 2010.
It operates from a network of 241 stores, of which 190 stores are located in France, making it France’s second-largest furniture and household goods retailer. In addition, Conforama operates 51 stores in 6 other European countries. Its real estate assets include 98 owned retail sites, 14 warehouses and 6 administrative buildings.
“This planned cession to a global furniture sector player is a major strategic opportunity for Conforama,” said PPR chairman and chief executive Francois-Henri Pinault. “Steinhoff International has an intimate understanding of Conforama’s business and the two companies operate in complementary markets.
“The expertise and experience of these two players would provide Conforama with the means to successfully continue to mine the potential of its markets.”
The proposed transaction should be concluded in the coming weeks, following consultation with personnel representative bodies, as required under French law, and will be submitted for the approval of the relevant competition authorities.
Subject to the successful conclusion of the negotiations, Conforama will refund PPR’s working capital facility and, in this regard, Steinhoff has secured a new working capital facility for Conforama.
“I would be particularly proud and eager to see Conforama join the Steinhoff group,” said Conforama chairman and CEO Theirry Guibert. “With Conforama being part of an industry player like Steinhoff, we will be able to pursue the strategic goals of the company, accelerate its development and establish itself as a leader in products for the home.”
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