JOHANNESBURG (Reuters) – South Africa’s competition regulator on Wednesday gave retailer Lewis Group approval to purchase more than 60 stores from failed furniture firm Ellerine — an $8 million deal that is expected to save nearly 400 jobs.
The Competition Tribunal said in a statement it would allow Lewis, which sells furniture and appliances to lower-income shoppers, to acquire 63 shops operating under the Beares brand as long as there were no job cuts.
Acquiring Beares will give Lewis greater exposure to higher income markets, Lewis’ chief executive has said. The company plans to spend up to 90 million rand ($8 million) on the deal.
Ellerine, the furniture unit of failed lender African Bank Investments (Abil), was forced into business rescue — similar to Chapter 11 bankruptcy in the United States — in August after Abil cut off funding.
Days later, Abil itself was rescued by the central bank after it was toppled by surging bad debts.
Ellerine owes its creditors around 1.3 billion rand. It is in talks to sell off other units to South African companies, including its nearly 80 stores outside of South Africa.
(1 US dollar = 11.2480 South African rand)
