Hungary's Indotek Could Take Minority Stake In Auchan Retail's Local Unit
Hungarian real estate group Indotek is in talks with ELO Group about forming an alliance that could involve taking a minority stake in French retailer Auchan Retail's Hungarian unit, ELO said in a statement.
The move would fit into a broader drive under Prime Minister Viktor Orban, which has seen the state and Hungarian investors boost their stakes in key sectors of the economy, such as the media, energy and banking.
The deal would also involve ELO's Ceetrus Hungary unit, which operates 600,000 square metres of retail space in Hungary, according to information on its website.
Auchan currently operates 24 stores in Hungary, according to its website.
"The aim of this alliance in Hungary is to accelerate the development of Auchan and Ceetrus in Hungary, which could benefit from synergies between the companies thanks to Indotek's knowledge and expertise in the Hungarian retail market," the statement said.
"This alliance could be accompanied by Indotek taking a minority stake in the capital of ELO's Hungarian subsidiaries (Auchan Hungary and Ceetrus Hungary)," it added.
It said a number of Auchan stores in shopping centres already belonged to Indotek group, whose assets under management are focused on the real estate sector and non-performing corporate loans secured by real estate.
Completion of the planned transaction is subject to approval by the Hungarian competition watchdog, it said.
In August, Auchan Retail reported a 3.2% revenue increase in the first half of its financial year, however EBITDA was up for the period.