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Carrefour, Wal-Mart, Tesco Eye Russia’s New Retailer
Retail giants Carrefour, Wal-Mart and Tesco are eyeing Russia’s new X5 Retail Group. The deal, however, can be reached no earlier than in 2008 when X5 will be able to use an option to buy the Karusel supermarket chain. Alfa Group, X5’s major shareholder, may expect to receive a 25-percent premium to the chain's market value in the deal, experts estimate.
Carrefour, Wal-Mart and Tesco are interested in buying X5 Retail Group, a top manager in X5 told Kommersant last Friday, saying that representatives of France’s Carrefour met X5’s top managers last fall. X5 managers have also recently met their counterparts from Tesco and Wal-Mart. The top source of Kommersant says that the parties will most probably discuss the sale of Alfa Group’s stake. He says, though, that there are direct talks as yet.
The deal, however, is not likely to be closed till 2008 when the option to buy the Karusel supermarket chain is used. Lev Khasis, head of X5 Retail Group, confirmed earlier that the option to buy Karusel would be used in 2008. Mr. Khasis would not comment on the possible deal on Sunday.
X5 Retail Group (former Pyaterochka Holding) was set up in May 2006 following the merger of two retail giants, Perekrestok and Pyaterochka. The chain united 451 Pyaterochka and 168 Perekrestok stores before the end of 2006. The company’s profits in 2006 were over $3.45 billion, according to early reports. Alfa Group’s shareholders own 47.8 percent in X5, 21.2 percent belongs to Pyaterochka’s founders with 6.2 percent in hands of X5 managers. 24.2 percent of the stock is floated at the LSE.
Carrefour and Wal-Mark have declared their interest in Russia before. Carrefour is negotiating the purchase of shopping malls in Rostov-on-Don and Krasnodar. The French company says it will start its expansion in Russia in regions, opening from 5 to 10 stores in 2007. Wal-Mart has been rumors to be in talks to buy Ramstore and St. Petersburg Lenta retail chains. The information has not been confirmed yet, though.
The Russian food retail market is expected to be growing 16 percent annually till 2010.
www.kommersant.com
All the Article in Russian as of Jan. 29, 2007
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