Woolworths given free rein to collar Absolute Pets

The Competition Commission has given the green light for Woolworths’ acquisition of Absolute Pets from Sanlam Investment Management, subject to conditions. 

The deal now requires approval from the Competition Tribunal.

Absolute Pets is South Africa’s largest specialist pet products retailer, with 157 stores countrywide. It sells pet food as well as a broad range of pet accessories, toys, hygiene, clothing, health and travel items, and provides pet-related services, such as pet spas and grooming. 

Established in 2005, Absolute Pets has a loyal customer base and a strong product offering.

In October 2023, when Woolworths announced its intention to acquire 93.45% of the shares in Absolute Pets, the retailer said pet care was an attractive and rapidly developing market, with substantial growth potential.

“It is also an increasingly important category for Woolworths customers, who consider their pets an integral part of their families. Absolute Pets has a complementary brand positioning, a well-established market presence, and is led by a strong management team,” Woolworths said.

“The acquisition of Absolute Pets will accelerate Woolworths’ pet strategy by bringing together two strategically aligned businesses and positioning the group well to become the end-to-end pet-care destination of choice in South Africa.”  

In a company statement, WHL Group CEO Roy Bagattini said Absolute Pets and Woolies were a natural fit. 

“Both have a strong commitment to excellence and quality. The Absolute Pets brand has earned the trust of pet owners across South Africa, and I am truly excited by the opportunities our partnership brings to leverage our joint strengths and expertise to provide even more customers with the best overall pet service and experience in the market.”

Absolute Pets CEO Stephen Warner and the current management team will continue to manage the business under the Absolute Pets brand, supported by the Woolworths Group. 

Woolworths already sells pet food, treats, accessories and toys, clothing and grooming products for cats and dogs, as well as its own private-label pet-care brands, namely Posh Pets, Fresh Pet and Country Road. The retail giant also offers pet insurance, WPETInsure, through Woolworths Financial Services, providing benefits and cover options for routine care, accidents, illnesses, third-party liability and burial and cremation.

The retailer will be required to meet conditions set by the Competition Commission, which include establishing new stores in South Africa and creating new permanent employment opportunities to service the new stores. 

The merged entity will have to set up an employee share ownership programme and financially support the effective participation and expansion of black-owned small to medium enterprises that operate within Woolworths’ pet-care products’ supplier base.

Bagattini told Daily Maverick this month after the retailer’s interim results were released that they were hopeful the deal would be approved within a couple of months, after “a lot of back and forth” with the Department of Trade, Industry and Competition. 

“People consider their pets as their family members and spend a lot of money on their animals. The pet segment has worked extremely well for us. The acquisition of Absolute Pets will put us in a leading position, and from that we can expand. What we bring to the table is some really great synergies in pet care in the broader sense. It’s a growth sector for our business and we want to be the leader in this segment in South Africa.” 

Bagattini said while pet food was rewarding, what really sold within the pet-care category were accessories and toys. “When you look at how much money people are spending on furry little balls and animal toys it’s remarkable. We’re very excited.” DM