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PJSC MegaFon (MFON)
PJSC MegaFon: Merger of Svyaznoy and Euroset Creates World's Largest Retail
Chain[1] in the Technology Sector
28-Apr-2018 / 10:05 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Merger of Svyaznoy and Euroset Creates World's Largest Retail Chain[1] in
the Technology Sector
Moscow, Russian Federation (28 April 2018) -Public Joint Stock Company
"MegaFon" (LSE: MFON), a pan-Russian operator of digital opportunities,
which owns 100% of shares of Euroset Group and SLV Group, the controlling
shareholder of Svyaznoy Group, today announced their agreement to merge
Svyaznoy and Euroset retail chains. SLV will become the controlling
shareholder of the merged company, with PJSC MegaFon obtaining a minority
share.
The Combined Company will operate the largest retail chain worldwide in the
technology sector by number of stores (more than 5,000) with the mission of
increasing the accessibility and consumer understanding of modern high-tech
products. For this purpose, more than 30,000 sales consultants will help
customers to increase their knowledge of the world of high technologies. The
daily footprint in the stores of the Combined Company exceeds two million
customers.
Under the terms of the agreement, Lefbord Investment Limited, a wholly-owned
subsidiary of MegaFon, will contribute its 100% interest in Euroset Holding
N.V., which owns the operating companies of Euroset, to DTSRetail LTD, a
Cyprus company, which will own the operating companies of Svyaznoy. As a
result, Lefbord Investment Limited will receive a 25% plus 1 share interest
and 2 seats on the Board of Directors of the Combined Company. The parties
expect to complete the transaction by mid-May.
The merger of two leading players in the technology retail market creates
additional growth opportunities. The Combined Company aims to launch new
products and services, expand business relationships and improve financial
performance. The Combined Company will continue to actively develop its own
online platform and implement a strategy for omnichannel development. At the
end of 2017, revenues from online sales of the combined company amounted to
approximately 22 billion rubles.
Sergey Soldatenkov, CEO at MegaFon, said: "Multibrand is a strategically
important distribution channel for MegaFon and an important pillar of our
digital strategy. We believe that cooperation with a successful multibrand
player with a strong brand will help us to develop a deeper understanding of
customer needs and improve the quality of our service. We are excited to
partner with SLV Group in a transaction that we believe will enable MegaFon
to benefit from an experienced and professional management team operating an
integrated retail network. We also believe that this merger of Euroset and
Svyaznoy is a rational move towards an optimal mobile distribution sector."
Oleg Malis, founder of SLV Group, commented: "This transaction is in line
with our strategy, as we see great potential in the combination of physical
stores and an online platform. The Combined Company is an educational
platform for our clients and is an important element of the digital economy.
Every day we speak to millions of people and explain how new technologies
enable them to improve their lives. We aim to explain complex products to
our clients for them to benefit from understanding and using these
products."
For More Information:
PJSC MegaFon
Investors: Dmitry Kononov Tel: + 7 926 200 6490 dkononov@megafon.ru
Director for Investor Relations and M&A
Media: Yulia Dorokhina Tel: +7 926 510 58 54 ydorokhina@megafon.ru
Head of Media Relations
SLV Group
Media: Tatiana Voltsinger Tel: +7 925 910 36 41 volts@solvers.ru [1]
Notes to Editors
MegaFon PJSC operates in all segments of the telecommunications markets in
Russia, and in the Republics of Abkhazia, South Ossetia and Tajikistan.
MegaFon is a recognized market leader in the provision of mobile data
services, was the first operator in Russia to launch commercial operation of
a third generation (3G) network and was the first operator in the world to
launch commercial operation of an LTE-Advanced (4G) data network. In
February 2017, MegaFon acquired a 15.2% equity interest (which represented
63.8% of the voting shares) in Mail.Ru, a leading company in the
Russian-speaking internet market. MegaFon is traded on the Moscow Stock
Exchange and the London Stock Exchange under the symbol MFON. Mail.Ru is
traded on the London Stock Exchange under the symbol MAIL. Additional
information about MegaFon and the products and services provided by the
telecom segment can be found at http://www.megafon.ru and information
related solely to Mail.Ru can be found at http://www.mail.ru [2].
SLV Group is a group of companies with a diversified portfolio of assets,
founded in Moscow, in 2011 with Mr. Oleg Malis as the major shareholder. SLV
Group is the controlling shareholder of the biggest consumer electronic
retail chain Svyaznoy. The Group also includes a real estate development
company Solvers Estate and the management company of MIBC Moscow City (CITY,
PJSC).
Cautionary Statement Regarding Forward Looking Statements
Some of the information in this document may contain or refer to projections
or other forward-looking statements regarding future events or the future
financial performance of the Company. You can identify forward looking
statements by terms such as "expect", "believe", "anticipate", "estimate",
"forecast", "intend", "will", "could", "may", or "might" the negative of
such terms or other similar expressions. The Company wishes to caution you
that these statements are only predictions, and are based upon various
assumptions which are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are beyond
our control. We may not achieve or accomplish these plans or predictions.
The Company does not necessarily intend to update these statements to
reflect events and circumstances occurring after the date hereof or to
reflect the occurrence of unanticipated events. Many factors could cause the
actual results to differ materially from those contained in projections or
forward-looking statements of the Company, including, among others, general
economic conditions, the competitive environment, risks associated with
operating in Russia, rapid technological and market change in the industries
in which the Company operates, as well as many other risks specifically
related to the Company and its business and operations.
Statement Regarding Inside Information
Some of the information in this document may be inside information. The
subject matter, the identity of the issuer, the identity of the persons
making the notification and their titles, and the date and time of the
notification are all as set forth above.
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[1] By the number of stores operating in the network
ISIN: US58517T2096, RU000A0JS942
Category Code: MSCH
TIDM: MFON
Sequence No.: 5483
EQS News ID: 680627
End of Announcement EQS News Service
1: mailto:ydorokhina@megafon.ru
2: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=d1749cdea0c86f4d6b36fc4bea82e86e&application_id=680627&site_id=vwd&application_name=news
(END) Dow Jones Newswires
April 28, 2018 03:04 ET (07:04 GMT)
