DJ Magnit announces approval by the Federal Antimonopoly Service of the DIXY business acquisition
MAGNIT PJSC (MGNT)
Magnit announces approval by the Federal Antimonopoly Service of the DIXY business acquisition
15-Jul-2021 / 13:01 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
=----------------------------------------------------------------------------------------------------------------------
Magnit announces approval by the Federal antimonopoly service of the dixy business acquisition
Krasnodar, Russia (July 15, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers,
announces it has received an approval from the Federal Antimonopoly Service ("FAS") in connection with the acquisition
of 100% shares of the DIXY Holding Limited (Cyprus) by JSC "Tander", main operating vehicle of Magnit.
Assets acquired
According to the agreement Magnit acquires a holding entity for a group of companies that operate convenience stores
under the DIXY brand and superstores under the Megamart brand in three federal districts. As part of the transaction
Magnit will also acquire distribution centers and a truck fleet. Total number of stores in the perimeter of the deal
will account for around 2,500 outlets. Detailed breakdown of assets will be available at the deal closing.
Approvals and closing
The agreement has been approved by Magnit's Board of Directors on May 18, 2021[1]. No further approvals after today's
clearance by Federal Antimonopoly Service are required. Parties aim to satisfy all other conditions to close the
transaction shortly. Further announcement will be made in the due course.
According to the FAS prescription, the Company will need to comply with the 25% market share limit in the specific
number of municipalities[2]. As a result, 142 DIXY convenience stores in 53 municipalities will be excluded from the
deal perimeter and hence will not be acquired by Magnit. These stores are located in small municipalities in the
North-West and Central regions and none is located in Moscow or St. Petersburg keeping strategic rationale of the deal
fully unchanged.
In addition to that, according to FAS prescription, the Company will have to reduce one-time its market share limit to
35% in 22 municipalities till 1st July 2022. This may potentially imply very limited number of store closures in the
respective areas. The Company will conduct a detailed analysis of operational and financial performance of stand-alone
outlets on a case-by-case basis aiming at potential adjustments to its existing network or recently acquired stores
under the DIXY brand. The company doesn't expect any significant changes to its market positions and financial
performance in 2021 or going forward as well as its store opening guidance.
Given the scale of the transaction and its effect on the combined market positioning the Company in a proactive manner
has taken additional responsibilities to keep specific mark-up on certain fresh-food SKUs from the list of socially
important product categories[3]. Within one year since completion of the transaction Magnit will maintain quarterly
average 0% mark-up for one entry price SKU in each of the following product categories: poultry, milk, bread. This
commitment will cover the entire Magnit network. The Company has also agreed that special terms for pensioners under
Magnit's loyalty program will be available for DIXY and Megamart customers.
Magnit's overall pricing policy implies very low mark-up for certain entry price socially important articles, which is
in line with additional responsibilities taken now. The Company believes that consumers will benefit from affordable
offering of socially important goods making its overall perception and attractiveness even stronger. Magnit's flexible
financial position, further profitability improvement and potential post-deal synergies in category management,
combined sourcing and other business processes allow to maintain its short-term and long-term operational and financial
guidance, including gradual profitability improvement, without any changes.
For further information, please contact:
Dina Chistyak
Head of Investor Relations
dina_chistyak@magnit.ru
Office: +7 (861) 210 9810 x 15101
Media Inquiries Twitter
press@magnit.ru @MagnitIR
Note to editors
Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is
headquartered in the southern Russian city of Krasnodar. As of March 31, 2021, Magnit operated 39
distribution centers and 21,900 stores (15,098 convenience, 471 supermarkets and 6,331 drogerie stores)
in 3,770 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the audited IFRS 16 results for FY 2020, Magnit had revenues of RUB 1,553.8 billion
and an EBITDA of RUB 178.2 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT)
and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's
of BB.
Forward-looking statements
This document contains or may contain forward-looking statements that may or may not prove accurate. For
example, statements regarding expected completion of the transaction, sales growth rate and/or store
openings are forward-looking statements. Forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause actual results to differ materially from what
is expressed or implied by the statements. Any forward-looking statement is based on information
available to Magnit as of the date of the statement. All written or oral forward-looking statements
attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update
or revise any forward-looking statement to reflect any change in circumstances. -----------------------------------------------------------------------------------------------------------------------
[1] https://www.magnit.com/en/disclosure/regulatory-news/tabs-Disclosure;
[2] According to the Competition Law of the Russian Federation N 135-FZ as of 26 July, 2006;
[3] The list of socially important articles was approved by the Russian Government (decree N530 as of 15 July, 2010) -----------------------------------------------------------------------------------------------------------------------
ISIN: US55953Q2021 Category Code: MSCU TIDM: MGNT LEI Code: 2534009KKPTVL99W2Y12 OAM Categories: 3.1. Additional regulated information required to be disclosed under the laws of a Member State Sequence No.: 117689 EQS News ID: 1219284 End of Announcement EQS News Service =------------------------------------------------------------------------------------ Image link: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1219284&application_name=news
(END) Dow Jones Newswires
July 15, 2021 06:01 ET (10:01 GMT)
