Steinhoff International has agreed to pay Poundland chain £597 million in a takeover deal.
South African retail group Steinhoff International currently own 40 retail brands across 30 countries including UK chains Harveys and Bensons for Beds.
Poundland manages over 900 stores across the UK, Spain and Ireland with 18,000 employees; however the chain has announced profits have fallen.
Steinhoff are paying Poundland 222 pence per share, the discount store’s share has previously dropped from 418p in February 2015 to below 200p before the agreement was announced.
The retail group had previously placed a 23% stake into Poundland and made an informal approach to buy the firm last month which the chain rejected.
Darren Shapland Poundland chairman said: “The Poundland board believes that Steinhoff's all-cash offer presents Poundland shareholders with an opportunity to realise their shareholding at a certain and attractive price.”
After announcements were made of the takeover shares rose by 12% and up 24.8p to 220.8p at market close.
Poundland profits have experienced a strain following its purchase of rival 99p store, the chain had previously experienced boost in sales during the financial crisis of the recession.
Despite the UK’s decision to leave the EU is predicted to cause a dent in economic growth, analysts have claimed Poundland and other discount stores are expected to have a positive outlook.
Darren Shapland talking about the deal added: "They share our vision for the growth and expansion of Poundland and, as such, we believe they are a suitable and appropriate partner for our colleagues, our suppliers and stakeholders."