Pepkor Creates R21.3 Billion FintechCo Through Shop2Shop Merger

Retail group Pepkor Holdings announced the creation of a new merchant commerce and fintech platform, FintechCo, by merging its wholly-owned subsidiary Flash with payments provider Shop2Shop. The transaction values the combined entity at approximately R21.3 billion, with Pepkor securing a controlling 57.1% stake. To finalize the merger, Pepkor contributed its shareholding in Flash, valued at R10.6 billion, and provided a R1.57 billion cash subscription for new Shop2Shop shares.

FintechCo integrates Shop2Shop's merchant acquiring and payment networks with Flash's digital product capabilities and value-added services. The merged entity serves approximately 177,000 merchants and processes an annual throughput exceeding R200 billion. Pepkor intends to list FintechCo as a separate public company on the JSE within the next three years to unlock shareholder value.

The strategic expansion targets South Africa's informal market, placing Pepkor in competition with financial institutions such as Nedbank, Lesaka, and Capitec. While FintechCo focuses on merchant services, Pepkor's planned digital bank, code-named PlusB, will remain a separate legal entity to meet regulatory requirements. The deal is currently subject to regulatory and competition authority approvals in South Africa.