Angola OKs Portuguese retailer Sonae to set up shop

LISBON Dec 23 (Reuters) - Angola's government has approved the entry of Portugal's largest retailer Sonae into the southern African country's food retail market with a $103 million investment, the cabinet said.

It said Sonae's request has been approved under a new private investment law passed in April to attract overseas investors by offering incentives including tax breaks.

Angola's food retail market has attracted interest from major players, with U.S. retail giant Wal-Mart planning to enter one of the continent's fastest-growing economies through its Massmart unit.

South African retailers Woolworths and Pick n Pay are also eyeing a presence in the country.

Sonae's domestic market is under pressure due to painful austerity measures imposed by the terms of Portugal's international bailout and the company has expanded overseas by opening stores in Spain, Turkey, Egypt and Kazakhstan.

In April, Sonae announced a partnership for the Angolan market, taking 49 percent in a joint venture with Condis, controlled by Isabel dos Santos, daughter of the country's long-serving President Jose Eduardo dos Santos.

Sonae board member Luis Reis said in September the company plans to launch its operation in Angola in 2013, opening up to five hypermarkets in the capital Luanda in a first phase.

He added that Sonae will operate the hypermarkets rather than invest in the real estate for the stores, and hopes to open a logistics centre and create ties to the local agricultural sector to gain competitive advantage. [ID: nL5E7KM48S]

Sonae shares were up 2.5 percent at 1604 GMT, outperforming the broader index in Lisbon which was 1.3 percent higher. (Reporting by Shrikesh Laxmidas; Editing by Erica Billingham)