Shoprite Holdings has sold its Nigerian business to local buyer Ketron Investment, nearly 16 years after the South African retailer opened its first outlet in the country.

Shoprite entered into a share purchase agreement with Ketron, a Nigerian company owned by a group of institutional investors led by property group Persianas, for the disposal of its entire interest in Retail Supermarkets Nigeria Limited, the companies said.

The price was not disclosed.

Shoprite shares were up 4.21% as of 0942 GMT.

Shoprite, one of the first South African companies to expand into Nigeria, is changing its model from an ownership to a franchise one after a review of its long-term options in Africa, once touted as the next bright growth spot for retailers.

The supermarket retailer had expanded aggressively in Africa, surpassing rivals such as Pick n Pay and Walmart’s majority-owned Massmart to become the continent’s leading food retailer with more than 2,800 stores in 15 countries.

But forays into markets including Angola and Nigeria, Africa’s most populous country, were marred by currency volatility, double-digit inflation, high import duties and dollar-based rentals.

It also exited Kenya and restricted capital allocations to its supermarkets outside South Africa.

The terms of the Nigeria transaction include a franchise agreement, which secures the Nigerian retailer’s right to continue to use the SHOPRITE brand, Shoprite said.

It also includes an administration and services agreement which provides the business with administration and technical support from the Shoprite Group for an initial period of five years.

Shoprite said 70% of the transaction proceeds have been received with the balance due in four equal instalments over 30 months.

Ketron Chairman Tayo Amusan said the deal will ensure the continued “operations of one of the biggest retail success stories in Nigeria”.

Ketron said it plans to open additional stores and introduce more Nigerian-made products.

Since its launch in Lagos in December 2005, Shoprite has expanded to more than 25 retail stores across Nigeria, including some of the largest in West Africa.

Reuters reported in April that Persianas had emerged as the buyer of Shoprite’s Nigerian operations after a bidding process. (Reporting by Nqobile Dludla in Johannesburg, additional reporting by Alexis Akwagyiram in Lagos; editing by David Goodman, Jane Merriman and Kim Coghill)