JD Group buys Steinhoff unit for R3bn

Furniture retailer JD Group [JSE:JDG] said on Monday it has agreed to buy Steinhoff's South African retail unit for about R3bn.

Steinhoff International Holdings [JSE:SHF] will also buy JD Group's stake in its Polish furniture retail unit, Abra Spolka Akcyjna (Abra), for R134m. South African-based Steinhoff will become a significant shareholder in JD group after the transaction, giving it a 26% stake in the furniture retailer.

"The deal will enable JD Group to strengthen its balance sheet and retain significant capacity to invest in growth," the companies said in a joint statement.

JD Group will buy Steinhoff's Unitrans Auto for R3bn through an issue of 60 million shares at R50 per share.

It will also acquire Steinbuild from Steinhoff for about R169m via an issue of more than 3.3 million shares at R50 per share.

Steinhoff will pay R134m to acquire JD Group's Polish unit, Abra.

Shares in JD Group rose 1.56% to R46.99 and Steinhoff fell 0.96% to R23.80.