French firm, CFAO has purchased a 74.9% stake in Steinhoff’s automotive division, Unitrans. Steinhoff launched the subsidiary to “simplify” its portfolio after becoming embroiled in a major financial scandal two years ago.
The sale comes after eight months of negotiations between CFAO – which is owned by Toyota Tsusho Tosho Corporation – and Steinhoff. A local investment group, Kapela Holdings will acquire the remaining 25.1% of Unitrans’ capital.
CFAO mainly offers supply and logistics services to the local automotive sector. CFAO’s presence is relatively small compared to Unitrans which has 18 distributed brands, 99 points of sale, 6,000 employees and €1.5 billion in turnover.
Africa’s main automotive market
CFAO will now have access to the largest African market for the sale of new vehicles.
More than 550,000 units were sold in South Africa in 2018, representing 45% of new vehicle sales on the continent, according to CFAO.
“It is time for Unitrans Motors Group to enter a new phase of its development, thus strengthening its strategic position in the automotive distribution sector […] We believe we have many mutual opportunities for our two groups,” according to a joint statement by CFAO CEO Richard Bielle and Unitrans CEO Brynn Stephenson.
Steinhoff is gradually reducing its debt to cope with a financial malpractice scandal worth €6.5 billion. It has been selling off some of its 40 subsidiaries and holdings, in an attempt to restore its finances.
Steinhoff, founded in 1964, was originally a furniture manufacturer and later became a global conglomerate listed on the Johannesburg and Frankfurt stock exchanges. It has a presence in Europe, America, and Australia.
A few weeks ago, Steinhoff also announced that it was selling part of its Australian subsidiary, Greenlights Brand, and 25% of its shares in Pepco, through a public offering scheduled for next year.
Steinhoff CEO Louis du Preez says “the closing of the transaction is another successful step in the further simplification of the group’s portfolio and the reduction of our balance sheet debt”.
The Unitrans brand will soon be replaced by CFAO Motors.