The Russian supermarket operator Magnit is consolidating its position in the sector by acquiring the competitor of the Premium Azbuka Vkusa segment.
Magnit, whose greatest shareholder is the Russian investment firm Marathon, has been transforming Itelf into a conglomerate in recent years. He is currently buying a control participation in Azbuka Vkusa.
That will add a high -end segment to the Magnit already through business, covering a wide range of the food retail market. Azbuka Vkusa is similar to Premium Grocers Whole Foods in the United States and Waitrose in the United Kingdom.
“The acquisition of Azbuka Vkusa gives us the opportunity to substantially strengthen our retail positions in Moscow and enter a mainly new segment for us, Premium Retail, which will allow us to cover virtually all the objectives of consumers in the retail food trade,” said CEO Yevgeny Sluchevsky in a statement.
Magnit already has a fixed presence, with more than 31,000 stores in Russia and the nearby Uzbekistan. He opened a total of 2,350 stores last year, according to a company’s profit report.
The company had strong growth last year. Net retail sales grew by 20.3% compared to the previous year, driven by a combination or 8.8% space growth and 11.2% of similar sales growth, the company said in its report.
Meanwhile, the online segment shot, with the gross merchandise value of electronic commerce (GMV), the total value of the merchandise sold, rather than BLING last year to rub 100.6 billion (USD 1.23 billion).
In 2023, Magnit completed his acquisition of the Kazan Express market and since then he has passed it to his own Magnit market, which has more than 4,600 collection points in 275 cities.
The current acquisition of Azbuka Vkusa is waiting for the approval of the Russian government and compliance with some terms agreed by the parties, according to a press release.
The value of agreement is estimated at 35–40 billion rubles ($ 428–490 million), the RBC media reported Wednesday, citing three sources familiar with conversations.
“The Azbuka Vkusa brand is well known for its wide range of exclusive and high quality products, as well as its high level of service and customer base,” said Sluchevsky.
“A strong point is the prepared food of Azbuka Vkusa,” Sluchevsky emphasized. “This experience will help improve and expand the offers of Magnit Group stores in a segment that is currently the fastest in retail trade.”
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