Staff Writer
South African retail group Pepkor Holdings Limited has announced plans to combine its Flash business with fintech company Shop2Shop to create a large-scale merchant commerce and financial technology platform targeting both the formal and informal economy.
The proposed transaction will see Pepkor acquire a controlling 57.1% stake in the newly created entity, referred to as FintechCo, through a combination of a R1.57 billion cash investment and the contribution of 100% of its ownership in Flash, valued at R10.6 billion.
The transaction implies a total equity valuation of approximately R21.3 billion for FintechCo. Pepkor said the combination will bring together Flash’s value-added services (VAS) distribution network and digital products platform with Shop2Shop’s merchant-focused fintech capabilities, including payments, acquiring, cash management and trade services.
The merged platform is expected to process annual throughput value exceeding R200 billion, creating one of South Africa’s largest merchant commerce and fintech ecosystems.
Pepkor said the transaction supports its strategy to expand its Informal Market Platform segment by strengthening its position in South Africa’s growing informal economy.
The company said the informal market is supported by resilient consumer demand and increasing merchant participation, creating opportunities for digitally enabled solutions that still accommodate cash-based transactions.
“Together, Flash and Shop2Shop will provide extended coverage of the informal market value chain, linking cash handling, acquiring, payments, VAS and related financial services,” Pepkor said.
The combined business will also leverage Pepkor’s retail ecosystem, which includes 32 million known customers, by increasing engagement between consumers and merchants.
Shop2Shop founder Peter Berry said the combination would allow the company to expand its product offering and scale its fintech platform.
Under the proposed agreement, Pepkor Proprietary Limited, a wholly owned subsidiary of Pepkor, will subscribe for new shares in Shop2Shop for R1.57 billion in cash. The funds will be used to settle Shop2Shop debt and other obligations.
Pepkor will also contribute Flash Mobile Vending Proprietary Limited, its wholly owned fintech subsidiary, in exchange for additional shares in Shop2Shop.
Following implementation of the transaction, Pepkor will hold 57.1% of FintechCo, while Shop2Shop shareholders will retain a minority stake.
Pepkor disclosed that Flash generated revenue of R11.15 billion for the 12 months ended September 2025, while Shop2Shop recorded revenue of R$9.33 billion for the 12 months ended June 2025.
Pepkor said the transaction creates a pathway to unlock shareholder value through a planned separate listing of FintechCo in the medium term.
The company and Shop2Shop shareholders have entered into a shareholders’ agreement that will govern the operations, rights and responsibilities of FintechCo following completion of the transaction.
Shop2Shop shareholders will maintain a minimum 15% shareholding in FintechCo for at least five years after implementation.
Upon completion, Pepkor will hold 57.1% of FintechCo, while Shop2Shop shareholders will hold the remaining 42.9%, including interests held by founders, related entities and employees.
