Safmar, the owner of M.Video, Russia’s largest consumer electronics retailer, will buy the Russian division of Media Markt from the Germany-based MediaMarktSaturn Retail Group (Media-Saturn-Holding) for RUB 10.7bn (€134m), the RBC news agency reported, citing the president of M.Video, Aleksandr Tynkovan. Media Markt’s entire Russian business will be transferred to Safmar, the German company announced.
MediaMarktSaturn, in turn, will acquire a 15% strategic stake in M.Video. In return for this shareholding in the Russian market leader, MediaMarktSaturn will pay €258 million to Safmar. Also, M.Video intends to join the planned European Retail Alliance as its third member along with MediaMarktSaturn and Fnac Darty.
The transaction, which is still subject to the customary conditions on regulatory clearance and others, is expected to be closed by September 2018. The merger of the companies at the legal level will take until the end of 2019.
MediaMarktSaturn said in its statement that the deal should allow MediaMarkt Russia to stem its operating losses and ensure continued participation in one of the fastest-growing markets in Europe.
The general director of M.Video, Enrique Fernandez, quoted by RBC, said the company could never manage to increase by the number of stores in the acquisition only through organic growth. According to him, the company will not retain the MediaMarkt name and the stores will be rebranded Eldorado or M.Video. The rebranding process will end in the second quarter of 2019, according to M.Video.