Private investment company Severgroup has agreed to acquire 42% interest in Russian hypermarket group Lenta, from Luna and the European Bank for Reconstruction and Development (EBRD), for a total consideration of $729m.
Of the total 42% stake, Severgroup will buy approximately 34.44% issued and outstanding voting shares from Luna, a company owned by TPG Capital Management. The remaining 7.47% stake in the Russian hypermarket group will be acquired from EBRD.
The transaction is currently subject to approval by the Russian Federal Antimonopoly Service and is expected to be completed by the end of May.
Severgroup CEO Alexey Mordashov said: “We see tremendous value in businesses that improve people’s quality of life and we believe there is great potential in retail as an industry which is now going through important transformation to meet the growing demands of consumers.
“Widely known as an efficient grocery retailer with one of the highest growth rates in the market, Lenta is a unique asset to unlock this potential in the Russian market.
“We are confident that combining Lenta’s highly professional management team and excellent corporate culture with Severgroup’s experience in building and managing successful businesses, deep expertise in both industrial and consumer sectors, as well as in the digital & IT sector, will enhance the company’s position as a leading grocery player in terms of customer’s service, offering and loyalty.”
Severgroup plans to make another offer to acquire the remaining Lenta shares for $18 per share or $3.60 per global depository receipt (GDR), following the completion of the current deal.
According to Lenta, the offer price implies a value of approximately $1.75bn for 100% stake in the company. The company expects to close the second part of the deal by the end of June.