Retail acquisition news : State-controlled Russian bank VTB Group has agreed to buy out a 29.1% stake in Russian supermarket chain Magnit for a sum of nearly RUB 138 billion ($2.45 billion) from its owner and founder Sergei Galitsky.

Established in 1994, Magnit has emerged as a leading Russian food retailer with a total of 16,350 retail stores as of 31 December 2017. Included in these are mostly than 12,000 convenience stores, 243 hypermarkets to go along with 208 Magnit Family stores and close to 4,000 Drogerie stores.

Headquartered in Krasnodar, the Russian food retailer has presence in more than 2,700 cities, towns and villages across seven federal regions in the country.

The transaction by VTB Group will see it become the largest shareholder of Magnit while Sergei Galitsky will retain only a stake of 3%, as reported by Reuters.

Sergei Galitsky, who did not specify the exact reason on why he was selling most of his stake in the Russian retail company has been quoted in Reuters, as saying: “The final push came from the fact that the company’s investors stopped seeing eye to eye with its shareholders over what the situation looks like going forward.”

In line with the sale of his stake, Sergei Galitsky has also stepped down as Magnit CEO.

VTB Group says that the successful development of Magnit in its 20-year history, practically reflected how the Russian product retail industry has emerged from an unorganized, conventional retail to a modern network sales format on par with the best practices adopted across the world in the sector.

Andrey Kostin – Chairman and President of VTB Bank Management Board, said: “Currently the global retail market is undergoing a period of significant transformation caused by rising consumer demands and preferences, mutual penetration of online and offline sales channels and increased role of high technologies.

“In Russia, we see vast potential for this segment’s perspectives, and using VTB Group’s expertise and financial resources we plan to take Magnit to a new level of its development.”

The transaction will be closed subject to approval from the Russian competition authority.

  Magnit, Retail acquisition news, Russia, Russian supermarket chain, Sergei Galitsky, VTB Group