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Sept. 25 (Bloomberg) -- Shogun Holdings und Finanz, a Swiss investment group, bought a 51 percent stake in a newly-formed group of South African pharmacies to challenge the country’s larger retailers.

Shogun paid 350 million rand ($31.3 million) for the stake in Alpha Pharm (Pty) Ltd, the two companies said today in an e- mailed statement. About 900 independent South African drugs retailers agreed to combine under a single entity as part of the deal.

“We look forward to leveraging the synergies created by this merger to enable these pharmacies to compete in a market increasingly dominated by major retail chains,” Lynton Lomas, Shogun’s representative in South Africa, said. “We respect the tradition of the independent community pharmacy in South Africa.”

South African retailers have struggled this year as shoppers battle with rising inflation and unemployment of more than 25 percent. Alpha Pharm will compete with Cape Town-based Clicks Group Ltd., closely held Dis-Chem and Shoprite Holdings Ltd.-owned Checkers.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net John Bowker, Gordon Bell

Bloomberg