TJ Strydom | JOHANNESBURG

South African retailer The Foschini Group (TFG) has agreed to buy Australia’s Retail Apparel Group (RAG) for a maximum of 302.5 million Australian dollars ($226.78 million), the company said on Thursday.

TFG, which owns British fashion retailers Phase Eight and Whistles, said it would pay cash for RAG and would retain the company’s current management.

RAG, established in 1987, has 400 stores which sell mostly mid-range to low-price menswear.

The price will be the lower of 302.5 million Australian dollars or seven times the company’s earnings for the year to end-June, TFG said in a statement.

($1 = 1.3339 Australian dollars)

(Reporting by TJ Strydom. Editing by Jane Merriman)