Spar South Africa has bought an 80% stake in Irish Spar wholesaler BWG Group.

The South African company, which has an annual turnover of €3.5bn and operates around 850 Spar stores, snapped up the majority stake in the business in a €55m deal.

The remaining 20% of the business will be owned by BWG CEO Leo Crawford, BWG group property director John Clohisey and BWG group finance director John O’Donnell.

The deal is understood to have reduced BWG’s borrowings and freed up around €100m for investment in the expansion of the business, which operates 421 Spar stores in Ireland.

The group will continue to be operated by current management and it is understood there will be no change to the structure of the existing business.

“This is a very positive and exciting development for BWG. In Spar South Africa we have secured a major international retail player as a strategic partner and a long-term investor in our business,” said Leo Crawford.

“We look forward to working with their team to accelerate the expansion of our operations and the growth of our wholesale and retail businesses in Ireland and the south west of England.”

Spar South Africa Group CEO Graham O’Connor said: “BWG is an excellent strategic fit for Spar South Africa. Apart from the significant additional financial strength we will bring to the business, the deal will bolster BWG’s purchasing power, deepen our expertise in store formats and design and facilitate knowledge sharing across all aspects of the convenience food retail sector including logistics, warehousing and distribution.”

He added the transaction would bring a “more geographically diversified revenue stream” to the business.