Magnit to acquire Russian retail chain DIXY for $1.25bn

Russian retailer Magnit, via its main operating subsidiary – Tander, will acquire DIXY Holding, the holding company for DIXY retail chain in Russia, for RUB 92.4 billion ($1.25 billion)

DIXY presently operates 2,651 convenience stores in Russia whose 2020 annual revenue was RUB 281.4 billion.

DIXY Holding also owns 39 superstores in Russia under the Megamart brand whose 2020 revenue was RUB 17.4 billion.

The majority of the DIXY convenience stores, at 1,329, are in Moscow / Moscow region, while 458 outlets are in the St.Petersburg / Leningrad region. The remaining convenience stores are located in the Central, North-West and Urals federal districts.

On the other hand, most of the Megamart superstores are located in the Sverdlovsk region with four of them in the Tyumen region.

As part of the deal, Magnit will also gain ownership of five distribution centers, which have a combined space of 189K sq.m, and are located in Moscow, St.Petersburg and the Chelyabinsk region.

Magnit plans to have the Dixy business continue as a separate legal entity with the stores to be run under the existing Dixy brand.

Magnit to acquire Russian retail chain DIXY for $1.25bn. Photo courtesy of Max071086/Wikipedia.org.

Jan Dunning – President and CEO of Magnit said: “Magnit’s key strategic priorities focused on return-driven profitable growth stay unchanged. While organic expansion in all core formats remains our primary focus, we are happy to selectively take advantage of this opportunity to support further growth with the acquisition of the strong retail brand.

“Upon completion of the transaction, we will significantly strengthen our market positions in both capitals, which are strategically important for Magnit’s further expansion in the country. High-quality locations, well-known brand and strong customer base in Moscow and St.Petersburg will allow Magnit to become one of the top-players in the respective regions.

“Moreover, given scale of the transaction this may substantially improve our overall market position in the sector.

“Strong physical presence in Moscow and St.Petersburg will provide substantial support to further development of our e-grocery initiatives.”

The closing of the deal is contingent on approval of the Federal Antimonopoly Service of the Russian Federation and the meeting of other conditions.