After rejecting an informal offer last month, Poundland has agreed to a £597m takeover by Steinhoff International.
In the UK, Steinhoff owns bed brands including Slumberland, Dunlopillo, Myer's and Staples, and operates through furnishing retailers Bensons for Beds and Harveys.
Markus Jooste, CEO of Steinhoff, says: "The board of Steinhoff and its management team are enthusiastic about the opportunities that this transaction brings – we believe that there is significant merit in bringing Poundland into Steinhoff's global network.
“Steinhoff recognises the strength and value of the Poundland management team and anticipates that they will play a key role in the ongoing growth and development of Poundland as part of the Steinhoff group.”
Steinhoff had an existing 23% stake in Poundland.
John Colley, a Professor of Practice at Warwick Business School, comments: "Following Steinhoff International's failed attempts to buy Darty, the French electrical retailer, and Home Retail Group, owner of Argos, it has now agreed to buy Poundland for £600m. In view of current economic uncertainty and market and currency turbulence this is a bold move by Steinhoff against a UK background of stalled merger activity.
"Merger activity is generally governed by two factors. These are firstly liquidity, the ability to raise cash from reserves, banks, institutions and secondly confidence in future trading conditions. One suspects it is this second element and Brexit which has drawn Steinhoff's attention.
"Discounters usually benefit from recessions as consumers become more price sensitive. Aldi, Lidl, and Primark have all seen increased traction since the 2008 recession. However, the pound format market has become quite crowded as Poundstretcher, Poundworld and others have entered the market and increased their presence."
