Turkey's Arçelik buys Defy Appliances
25 July 2011
Turkey's Arçelik Group, a member of the Fortune 500-listed Koç Group, has bought itself a springboard into the African continent, in the form South African appliance manufacturer Defy Appliances, for around US$324-million (R2.25-billion).
Arçelik announced in a statement on Thursday that, "in line with our growth strategy in emerging markets", it had signed a share purchase agreement to acquire 100% of the shares of Durban-based Defy from Swiss-based Franke Holdings.
"Through this acquisition Arçelik will strategically position itself on the African continent, which I believe offers high growth potential," Business Day quoted Koç Holding chairman Mustafa Koç as saying last week.
Defy Appliances is the market leader in southern Africa, with net sales of R2.5-billion (about US$345-million) in 2010. The company has three factories in South Africa producing refrigerators, freezers, dryers, ovens and other cooking appliances.
Regulatory approvals for the deal, including the approval of the South African and Namibian competition authorities, are expected to be finalized by the end of September.
Koç Group is Turkey's biggest conglomerate, and the only Turkish company in the Fortune Global 500 list.
Arçelik's arrival on the southern tip of Africa follows US retail giant Walmart's recent R16.5-billion acquisition of a controlling stake in South African retailer Massmart, and reflects a growing trend among major multinationals to look to Africa and its fast-growing market of consumers for new growth.
According to a June 2010 report by US consultancy McKinsey, Africa is home to around 50-million middle-class households (defined as those with incomes of at least $20 000) as many as in India.