CFAO, specialized distributor and preferred partner of major international brands, has signed an agreement with Wendel and FFC—a joint venture between CDC International Capital and Qatar Investment Authority to sell 60 percent stake in SGI Africa, a fast-growing pan-African property company created by CFAO in 2015 to support its retail development plan. Wendel will acquire a 40 percent stake in SGI Africa while FFC will take up 20 percent.
A statement by Richard Bielle, Chairman of the CFAO Management Board on Tuesday said the “agreement sets the seal on the decision by leading partners to acquire a stake in SGI Africa and represents a vital contribution to implementing the CFAO Group business-development strategy in B2C distribution. This valuable property support will put the CFAO Retail division in a position to step up its expansion in target areas.”
The announcement wraps the round of financing for SGI Africa with a deal under which CFAO will retain a 40 percent stake to continue creating value through the company.
SGI Africa develops and operates shopping centers primarily through its PlaYce brand. The company opened its first PlaYce shopping center in Côte d’Ivoire at the end of 2015 (PlaYce Marcory, Abidjan) and aims to expand into seven other West and Central African countries:Cameroon, Republic of the Congo, Nigeria, Ghana, Gabon, Senegal, and the Democratic Republic of Congo. Over the next five to seven years, SGI Africa plans to build then operate around 20 shopping centers, each including a Carrefour hypermarket or supermarket, as well as a portfolio of brands under franchise to CFAO. These projects represent a total property investment of around €500 million ($553 million), to be financed by the company’s shareholders and banks. The partners will steadily invest up to €300 million in SGI Africa over the next few years, with an initial round of fundraising totalling some €60 million due to be completed in the coming weeks.
Wendel, which is buying a 40 percent stake will gradually invest up to €120 million ($132.56 million) in SGI Africa over the next few years, through Oranje-Nassau Développement. Povided certain customary conditions are met, Wendel will make an initial investment of around €25 million in SGI Africa.
After investing in IHS and Saham Group, this will be Wendel’s third direct investment in Africa and will bring its total investments in African companies to more than €800 million since 2013.
“With this investment in SGI Africa, Wendel is pursuing its sectorial and geographic diversification strategy by investing in the shopping malls sector will be central to African growth,” said Frédéric Lemoine, Chairman of Wendel’s Executive Board. “I have confidence in SGI Africa’s well-directed development plans in eight African countries. These plans are based on long-term trends such as the growth of the African middle class and the continent’s urbanization. I am also very pleased that Wendel teams up with such excellent partners.”