Marathon Group has completed the acquisition of 12.05 million shares (a 11.82% stake) in the Russian retailer Magnit from VTB Group. The value of the stake is RUB 62.5 billion (USD 1.0 billion), based on Magnit's closing share price on the Moscow Exchange on 23 May 2018.
The acquisition is an all cash transaction using Marathon Group's own funds and debt, and has been structured as a repo transaction.
Marathon Group President Alexander Vinokurov said: "This is a strategic investment for Marathon Group. We have expressed our interest in the retail sector since our inception and are delighted to have the opportunity to contribute to the development of one Russia's largest retailers."
He added: "We see Magnit as currently an undervalued asset and believe its management team and shareholders, with certain efforts, are capable of recovering its fair market value and regaining its leadership among Russian retailers."
Marathon Group's interest in the retail sector is not limited to the acquisition of the Magnit stake: it has established a sub-holding, Marathon Retail, to pursue other projects and increase the Group's exposure to the retail market.
Magnit is one of Russia's leading food retailers. The company has the number one market position by number of stores and covered geographies. As of 31 March 2018, Magnit operated 16,625 stores (12,283 convenience, 242 hypermarkets, 210 Magnit Family stores and 3,890 cosmetics stores) in 2,764 cities and towns throughout the Russian Federation. Magnit is also the largest private employer in Russia, with over 270,000 employees.