JOHANNESBURG (Bloomberg) — Steinhoff International Holdings Ltd. agreed to buy Africa’s Pepkor Holdings Pty Ltd. for 62.8 billion rand, or $5.7 billion, taking control of the region’s biggest retailer to enter the discount clothing market.

Steinhoff will purchase a 92.3 percent controlling stake in the apparel and home wares merchant, with management keeping the rest, the Johannesburg-based company said. The sellers include South African billionaire Christo Wiese.

“These are two very different animals coming together and there will be a lot of work to be done,” said David Shapiro, a director at Johannesburg-based money manager Sasfin Securities. “It seems like this was a deal Wiese wanted and he was pulling the strings.”

The transaction, the largest ever purchase of an African retailer, sent Steinhoff shares up as much as 2.4 percent in Johannesburg. Pepkor will assist Steinhoff in its goal to tap further into the discount retail segment as more South Africans seek out value amid high inflation and a 25 percent unemployment rate. South African retailers have struggled this year as the economy is set to grow at its slowest pace in five years.

Steinhoff, the country’s biggest furniture company, traded 1.8 percent higher at 56.95 rand as of 10:33 a.m. in Johannesburg, valuing the company at 142.8 billion rand. The company in June said it’s seeking a listing on the Frankfurt Stock Exchange to increase its exposure to investors on the continent, where it was founded in 1964.

The acquisition gives Steinhoff access to clothing and footwear sales for the first time. The purchaser also plans to expand the merged businesses throughout Europe and create “significant” cost savings through combining purchasing and other corporate activities.

Pepkor has more than 3,500 stores in countries across Africa, Australia and Eastern Europe, where its Pepco chain is the largest non-food retailer in Poland. It operates brands including Pep, Shoe City, and John Craig. The combined entities will have more than 155 billion rand in annual sales.

Steinhoff is buying a 52.5 percent stake in Pepkor owned by Titan Premier Investments Proprietary Ltd., controlled by Wiese, and another 37.1 percent from Brait Mauritius Ltd.

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