Russian retailer Magnit has completed the acquisition of the Dixy Group, which encompasses 2,477 stores across Russia, for RUB 87.6 billion (€1.01 billion).
With the purchase of Russia's fifth largest grocery retailer, Magnit said that it is expected to 'significantly strengthen' its position in the Russian retail sector, particularly in Moscow and St Petersburg.
It also sees the opportunity grow its e-commerce initiatives, with expected synergies in procurement, category management and various other business processes.
Dixy Group operates 2,438 convenience stores under the Dixy brand and 39 superstores under the Megamart brand. The majority of its convenience stores are in the Moscow region (1,319 outlets), as well as the St. Petersburg and Leningrad region (438 outlets).
As part of the acquisition, Magnit has also acquired five distribution centres and a fleet of around 700 trucks. The transaction includes fewer stores than originally planned, in order to meet competition laws.
'Strategically Important Transaction'
“We are delighted to complete this strategically important transaction," commented Jan Dunning, president and CEO of Magnit. "We are now focused on executing gradual integration which is the largest incorporation of acquired assets in the history of the Russian food retail industry."
Dunning added that the group is expecting to see the first 'quick wins' from the deal by the end of this year, and will complete the integration process, leading to further synergies, in the second half of 2022 or early 2023.
"I have no doubt that merging two strong corporate cultures will reinforce the best of our leadership capabilities and help us to build a unique winning culture in the Russian food retail sector," he added.
Due to the location of stores, and the potential overlap with existing outlets, Magnit said that the group may need to implement a number of store closures, or transformation into convenience, supermarket, drugstore, hard discounter or 'dark store' outlets.