JSE-listed media and e-commerce giant Naspers has announced it will invest R960m in South African e-retailer Takealot Online — which owns Takealot.com and other assets — in the process taking a majority stake in the company.
In a statement on Tuesday, Naspers said the investment follows a 2015 investment from both Tiger Global Management and Naspers and “underlines the continued commitment to Takealot and confidence in the potential of South Africa’s e-commerce sector”.
Naspers-owned Kalahari.com merged with Takealot on 1 February 2015, with Naspers and Tiger Global taking equal stakes of about 41% in the business. That deal was done mainly to create scale, the companies said at the time.
Takealot was launched in mid-2011 after Tiger Global and Kim Reid, a former Naspers executive and now Takealot CEO, acquired e-retailer Take2 and relaunched it with the aim of building South Africa’s biggest e-commerce company.
“Takealot has continued its robust growth since its merger with Kalahari,” Naspers said on Tuesday.
“Retail remains a highly competitive market in South Africa, and online retail accounts for less than 2% of the non-grocery retail market and less than 1% of the total retail market,” Naspers said.
“With online retail penetration, according to Euromonitor, in the teens in the US and UK retail markets, and at 17% in China, the potential in South Africa is clear to see.”
Reid said in the statement that Takealot is “super excited” about the new investment as it will help fund growth in a market with “huge potential”.
“Naspers has been a wonderful supporter of our business and we are grateful for their ongoing commitment and show of confidence in both the business and the market,” he said.
The Naspers investment is subject to approval by South Africa’s competition authorities. “Takealot has filed a large merger notification with the Competition Commission in anticipation of finalising the investment from Naspers, which would make Naspers the majority shareholder in Takealot.”
Reid told TechCentral via phone on Tuesday that despite Naspers’s planned new investment, the control structure of Takealot will remain unchanged. Naspers, he said, is acquiring non-voting shares. The board will continue to have two directors from Naspers and two from Tiger Global, plus Reid as fifth director. On a fully diluted basis, Naspers will hold about 53,5% of the equity and Tiger Global about 34% following the conclusion of the investment.
The planned deal comes just two weeks after US online retail giant Amazon.com agreed to buy Dubai-based online retailer Souq.com from Naspers and Tiger Global Management, among other shareholders. Souq is a significant player in the Middle Eastern e-commerce space.
Reid declined to say if the Amazon deal was in any way related to the decision by Naspers to invest new money in Takealot, saying Naspers would be able to answer that question. Naspers investor relations head Meloy Horn couldn’t immediately be reached for comment. — © 2017 NewsCentral Media