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€55m deal for slice of BWG store brands

Spar South Africa has entered into an agreement to buy an 80pc stake in BWG group for €55m.

BWG owns Spar in Ireland and services more than 1,100 stores with annual revenues of €1.2bn.

Its brands here include Spar, EuroSpar, Mace, ValueCentre and XL, and it has 35pc of the Irish convenience store market.

Spar South Africa is a wholesaler and distributor to more than 1,800 independent retailers spread across Southern Africa, with annual sales of around €3.5bn and a market capitalisation of approximately €1.5bn.

REDUCTION

Yesterday's announcement also secures a further reduction in BWG's borrowings following a buyback of exiting banks' debts. This further reduction in debt comes on top of that achieved as part of a successful refinancing concluded in November 2013, which also saw BWG agree new five-year banking facilities.

These facilities have been reaffirmed by BWG's lenders as part of this transaction with Bank of Ireland and AIB 
increasing their commitment, the company said.

The new partnership will have up to €100m to invest in the expansion of BWG's leading wholesale and convenience retailing operations over the next five years.

The BWG purchase will also allow Spar to diversify its revenue streams and foreign currency, the company said.

"The expansion of our 
business internationally is an important strategic move for Spar and provides an attractive entry point into food retail and wholesale industry in Ireland," Spar's chief executive Graham O'Connor said.

"Several sectors of the economy are already showing strong signs of recovery and consumer spending is improving."


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