Wednesday, December 12, 2007

Mercury Group acquires substantial stake in BVI-controlled retailer Dixy Group

Russia's Mercury Group announced that it has reached an agreement to acquire a stake of 50.96% in Open Joint Stock Company Dixy Group for an undisclosed amount. Both parties said the transaction is expected to close before February 1, 2008, and is still waiting approval from Russian regulators.

Mercury Group will make the acquisition by purchasing 100% of Dixy Retail Ltd, registered in the British Virgin Islands, which holds a 50.96% stake in the Dixy Group, via another holding company.

The BVI-controlled Dixy Group raised US$360 million through an initial public offering on Moscow's RTS and MICEX exchanges. At the current moment, about 48% of its shares are in free float. Currently, company's market capitalization is US$870 million, showing that the market value of the stake which Mercury Group is acquiring is worth approximately US$443 million.

Dixy is one of Russia's largest retailers, with 372 outlets, including 8 hypermarkets. Company's 2006 year sales totaled US$1.01 billion, in the first nine months of the year turnover reached US$990 million.

Mercury Group is a major Russian holding company with annual revenues of more than US$8 billion, having control over various assets including the Megapolis trading company, Orton Oil and the Moscow Wine and Brandy Distillery KiN.