Croatian retail giant Agrokor has signed a sale and purchase agreement with a consortium to acquire 53.1% stake in Slovenian retailer Poslovni sistem Mercator for €240m.

As per the agreement with the consortium comprising 12 selling stakeholders, Agrokor will pay cash of €120 for every share, valuing the company at €452m for 100% stake.

The deal between the two retailers is aimed at establishing largest retail company in Central and Eastern Europe market with annual turnover of €7bn.

Commenting on the alliance, Agrokor Group president Ivica Todoric stated that the company is delighted to form a strategic partnership with Mercator.

"This combination represents a compelling business opportunity to create a retail champion with the potential to increase overall competitiveness, preserve employment and to spearhead future economic growth and preserve employment not only for Slovenia and
Croatia but for the wider region and gain relevance on European scale," added Todoric.

"The combined company will offer our customers greater value through an expanded assortment of goods, the best prices and a higher quality of service."

The agreement is subject to regulatory approvals and Mercator’s debt refunding; however, it is expected to be completed by the end of 2013.

Agrokor, meanwhile, is keen to acquire the remaining stake in the retail company, claiming that it would publish a mandatory offer for the outstanding stake.