Russia’s X5 Retail Group has announced that it is acquiring the supermarket business of food retailer O’Key.
The acquisition will consist of 32 supermarkets, including 18 in St Petersburg, four in Moscow, two in Volgograd, and one each in the Moscow and Leningrad regions, Astrakhan, Voronezh, Lipetsk, Togliatti, Krasnodar and Novocherkassk.
As part of the deal, X5 will also acquire the real estate for 14 stores. All of the supermarkets will be integrated into X5’s Perekrestok chain.
“This transaction is fully in line with our strategy of strengthening Perekrestok’s position as the leading supermarket chain in Russia,” said Igor Shekhterman, CEO of X5 Retail.
“While we maintain a focus on organic growth for X5, we miss no opportunities to acquire promising locations in strategically important regions,” Shekhterman continued.
The retailer operates over 11,500 stores across Russia, including Pyaterochka proximity stores, Perekrestok supermarkets, Perekrestok Express, and Karusel hypermarkets.
Strategic Priorities
Last month, O’Key announced that it was considering the sale of its supermarkets, to allow the company to focus on developing its hypermarket and discounter stores.
“We are pleased to have reached the agreement with X5 Retail Group to sell our supermarket business,” said Miodrag Borojević, CEO of O’Key.
“The renewed company structure based on this sale will allow us to focus on the core strategic priorities of the business – efficiency improvement at compact city hypermarkets and accelerating the expansion of our discounters,” Borojević continued.
The deal will leave O’Key with 145 stores across Russia. In August, the group posted a 4.1% increase in profit for the first half of the year, with revenue up by 2.7%, to RUB 86 billion.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
