X5 Retail Group, Russia's largest retailer in terms of sales, has today announced that it has signed an agreement to acquire the Kopeyka discount chain for a total RUR51.5bn (€1.2bn), including assumption of debt.
Kopeyka is the number three 'soft discounter' in the Russian food retail market, operating over 660 stores in the country with a total selling area of more than 290,000m2. For the 12-month period ended 30 June 2010, the group reported net revenues of RUR59.3bn (€1.4bn) and EBITDA of RUR3.8bn (€90.7m).
The move is expected to reinforce X5's leading position in the retail market, the group noted, expanding its discounter presence in key markets such a Moscow and boosting its combined selling area.
'X5's multi-format growth has been led by soft discounters' success in winning customers and delivering industry-beating like-for-like sales performance,' said Lev Khasis, CEO of X5. 'Acquiring Kopeyka reinforces X5's number-one position in the Russian retail market, significantly expanding our soft discounter presence in Moscow and the Moscow region.
Market Analysts have, meanwhile, reacted to the news by highlighting the increasing lack of choice that US retail giant Wal-Mart is facing if it is to firm up plans to enter the Russian market.
The world's leading retail group has had a presence in Russia for some time, joining the Russian Retail Association in 2009, operating an office in Moscow and hiring an executive to explore business opportunities.
However, Bryan Roberts, a global research director at Kantar Retail, tweeted: 'If X5 completes Kopeyka deal, I guess that leaves Walmart with Lenta, Magnit or nothing?'
And Planet Retail's eastern Europe analyst Milos Riba added on Twitter: 'X5 has acquired Kopeyka for US$1.67bn. The number of potential acquisition targets in Russia is shrinking. Walmart, wake up!'
