"Magnit" closed the deal to buy the retail chain "Dixie"

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AK&M 23 July 2021 11:49

Magnit has closed a deal to buy the Dixie retail chain, which manages 2,477 thousand stores in Russia. This is stated in the message of "Magnet".

Magnit acquired DIXY Holding Limited, a holding company of a group of companies that manage 2,438 thousand stores at home under the Dixy brand and 39 superstores under the Megamart brand. Most of the stores near the house are located in Moscow and the Moscow region (1,319 thousand retail outlets), St. Petersburg and the Leningrad region (438 retail outlets). The rest of the stores near the house are located in the Ural Federal District. Most of the superstores are located in the Sverdlovsk region (35 objects), 4 stores are located in the Tyumen region. As part of the deal, Magnit also acquires 5 distribution centers and more than 700 trucks.

Retail outlets are comparable in size to the stores "Magnet" of the formats "at home" (298 sq.m - "Dixie" and 342 sq. m - "Magnet") and "superstore" (2,013 sq. m – "Megamart" and 2,002 sq. m – "Magnet").

Earlier, the FAS approved the acquisition of JSC " Thunder "(Magnit retail chain) of the Dixie retail chain and Megamart stores, issuing an order, the implementation of which should prevent the creation of a combined network that occupies a dominant position.

The company must comply with the order, as well as establish zero trade margins for certain types of socially significant goods. Thus, the merger of retail chains will take place only in those municipalities where the share of "Magnet" does not exceed 25%. Thus, in 53 municipalities, 142 Dixie stores will not be merged with the Magnit retail chain.

In 22 municipalities, the combined market share of Magnit and Dixie should be reduced within a year (until July 1, 2022) and not exceed 35%.

The Dixie trading network is obliged to ensure the execution of all existing contracts in force at the time of the transaction. The company is prohibited from creating discriminatory conditions in the market, restricting the access of suppliers and manufacturers to the commodity market.

The company "Thunder" has assumed additional obligations to establish zero trade margins for certain types of socially significant goods (milk, bread, chicken meat). Also, the loyalty program "Magnet" for pensioners will be extended to the stores "Dixie" and "Megamart" participating in the transaction.

As previously reported by AK&M, the transaction price may amount to 92.4 billion rubles and may be adjusted. The planned closing date of the transaction is August 31, 2021, taking into account the possible extension of the deadline until September 30, 2021 under certain circumstances. It is expected that the transaction will be financed from the available funds of Magnit and available unused credit lines.

DIXY Holding Limited is a holding company of a group of companies that manage 2.6 thousand stores at home under the Dixy brand with revenue of 281.4 billion rubles for 2020 and 39 superstores under the Megamart brand with revenue of 17.4 billion rubles for 2020. Most of the stores near the house are located in Moscow/Moscow region (1.33 thousand retail outlets) and St. Petersburg/Leningrad region (458 retail outlets). The remaining stores near the house are located in the Central, North-Western and Ural Federal Districts. Most of the superstores operate in the Sverdlovsk region, 4 stores are located in the Tyumen region.

PJSC "Magnit" (Krasnodar, TIN 2309085638) is a holding company of a group of companies engaged in retail trade through a chain of stores of the same name. The net profit of PJSC "Magnit" under IFRS for 2020 increased by 23.43 billion rubles to 32.99 billion rubles from 9.56 billion rubles a year earlier. Total revenue increased by 13.5% to 1.55 trillion rubles from 1.37 trillion rubles, gross profit-by 17.2% to 365.7 billion rubles from 311.9 billion rubles, EBITDA - by 21% to 178.19 billion rubles from 147.3 billion rubles.