Magnit To Buy Fewer Dixy Stores To Comply With Competition Law
Retailer Magnit's purchase of rival Dixy was approved by Russia's competition regulator on Thursday with the provision that 142 convenience stores be left out of the deal, the company said.
Magnit agreed in May to pay RUB 92.4 billion ($1.25 billion) to add Dixy's 2,651 stores and five distribution centres in Moscow, St Petersburg and other regions to its portfolio and has said it still has room to make other acquisitions.
But on Thursday Magnit said the total number of outlets included in the deal would be around 2,500, in order for the company to comply with a 25% market share limit in certain locations.
None of the 142 stores excluded from the deal are in the key markets of Moscow or St Petersburg, keeping the strategic rationale of the acquisition unchanged, Magnit said.
The Federal Antimonopoly Service also stipulated that Magnit would have to reduce market share in 22 municipalities to 35% until 1 July 2021, which Magnit said could mean a limited number of store closures in those areas.
"The company doesn't expect any significant changes to its market positions and financial performance in 2021 or going forward as well as its store opening guidance," Magnit said.
Last week, the company said that sales in its 'My Price' discounter portfolio have shown a 30% like-for-like sales uplift and the Russian retailer planning to increase the number of outlets under the banner to 200 by year-end.
Magnit has reported 13.5% year-on-year growth in revenue to RUB 1,553.8 billion (€17.8 billion) in its financial year 2020.