In a surprise move, A & R Whitcoulls has bought the Australasian operations of the Borders Group.

The New Zealand-listed company behind the Angus & Robertson and Whitcoulls bookselling chains had made a bid for the Australian and NZ Borders stores last year, but the deal collapsed in March. At the time, the company said a transaction now was "unlikely".

However, Borders announced today (June 6) it will sell 100% of its Australasian operation - along with its Singapore interests - to ARW in a deal worth A$110 million ($105 million). As well as the 30 existing Borders superstores in the region, ARW will gain exclusive rights to use the Borders trademarks in Australia, New Zealand and Singapore.

Ian Draper, ARW Group managing director, says the Borders business will complement the company's existing assets in Australia and New Zealand.

"Borders' experience-based model invites customers to browse books, magazines, music and DVDs, with cafes in most stores," he says. "It's a model which has proven popular in the local market, and targets a different demographic. We are pleased to bring these businesses together and excited about the opportunities presented by this transaction."

Borders Asia Pacific managing director John Campradt and his management team will remain in place and Draper believes they will be able to make a valuable contribution to the development of the broader group.

George Jones, Borders Group chief executive, says the deal provides the U.S. company with a significant cash infusion to further reduce debt: "ARW is a well respected and highly successful retail company with outstanding leadership that will be strengthened with the addition of the local Borders executive team and our stores," he adds. "We trust A & R Whitcoulls to successfully manage the Borders brand."

ARW owns and operates more than 260 stores including Australia's oldest bookstore chain Angus & Robertson and leading New Zealand book, magazine and DVD retailer Whitcoulls. Neither chain, however, are actively involved in the music market.