Lankan firm eyes Agora takeover
Posted on March 5th, 2022

Courtesy The Daily Star

Softlogic Holdings PLC is in talks with Agora to acquire the full operation of Bangladesh’s oldest supermarket chain, said the Sri Lankan conglomerate and people familiar with the matter.

A subsidiary, Softlogic Retail Holdings (private), inked an agreement on Friday to acquire Agora, said the group in a disclosure at Colombo Stock Exchange (CSE).

Softlogic, which has interests in ICT, healthcare, retail and financial services, said the deal would take place through “a series of transactions, subject to terms and conditions set out therein and receipt of regulatory approvals”.

An official in Dhaka with knowledge of the matter confirmed the development but did not share the takeover amount under negotiation.

Agora began discussions with the Sri Lankan conglomerate after its talks with Gemcon Group, owner of Meena Bazar, another leading supermarket chain in the country, fell through by the end of last year.

Agora and Softlogic have been in discussions for the past couple of months, according to the official.

With some 72.5 per cent owned by Frontier Fund-managed Swedish hedge fund Brummer & Partners and the rest by Rahimafrooz, Agora started its journey in 2001 as the country’s first supermarket chain.

Known for its automotive batteries, Rahimafrooz opened its first Agora supermarket outlet to attract shoppers with the convenience of an alternative to unorganised wet markets for purchasing groceries and other daily essentials.

In 2009, Brummer & Partners formed a joint venture with Rahimafrooz to grow its footprint and improve services.

Now Agora has 17 outlets — 14 in Dhaka and the rest in Chattogram and Sylhet.

With Agora’s ones, there are around 300 superstore outlets, including 208 of Shwapno, the largest retail chain in the country, said sector insiders.

Overall, supermarket chains register around Tk 3,000 crore in annual turnover, which is still insignificant considering the fact that wholesale and retail trade account for just 15 per cent of the country’s gross domestic product, according to operators.

Industry insiders said the sector would grow fast if a flat rate of value added tax (VAT) was imposed across the retail trade.

Currently customers have to pay a 5 per cent VAT on purchases from supermarket and large stores.

But they do not need to pay it when buying groceries from kitchen markets or neighbourhood stores, a discrepancy that keeps many customers away from superstores.

Softlogic says it encompasses a multi-brand, multi-channel strategy.

Its operations in Sri Lanka include branded apparel, consumer electronics, mobile handset retails and distribution, supermarkets and quick service restaurants, according to its disclosure at the CSE.

The group employs over 11,000 people in Sri Lanka and Australia and operates an asset base of over $750 million to generate an annual turnover of more than $420 million, it said in its website. 

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