Magnit PJSC, one of Russia’s leading retailers, has completed an acquisition of the DIXY retail chain with 2,477 stores in Russia, including 39 superstores under the Megamart brand.
The acquisition of the retail business of DIXY, the fifth-largest grocery retailer in the country, is expected to significantly strengthen Magnit’s competitive position in the Russian food retail sector. Strong exposure to the strategically important Moscow and Saint Petersburg regions, which account for approximately 29 per cent of the total Russian food retail market, will lead to a sharp increase in the company’s market positions in both capitals, including more than two-fold market share growth in both Moscow and Saint Petersburg. Strong physical presence in Moscow and Saint Petersburg will provide substantial support to further development of Magnit’s e-grocery initiatives.
Charles Ryan, Chairman of the Board of Directors, commented: “This transaction is a testimony to the structural changes in the Russian food retail industry and a mark of the success of Magnit’s turnaround story. The company has developed sufficient financial flexibility to execute an ambitious expansion program, combined with selective bolt-on acquisition opportunities and exploration of promising new niches. The Board is fully confident that this deal will benefit our customers and provide value to all our shareholders.”
Jan Dunning, President and CEO of Magnit, commented: “We are delighted to complete this strategically important transaction. We are now focused on executing gradual integration which is the largest incorporation of acquired assets in the history of the Russian food retail industry. At the same time, this process will not affect Magnit’s own expansion program and its ongoing retail and digital transformation. We expect to achieve the first quick wins by year-end 2021 and complete the integration process with the extraction of all strategic synergies in the second half of 2022 or the first half of 2023. Above all, retail is about people. We are pleased to welcome a team of over 40,000 strong professionals at Dixy to the Magnit family. I have no doubt that merging two strong corporate cultures will reinforce the best of our leadership capabilities and help us to build a unique winning culture in the Russian food retail sector.”
