X5 reaches agreement with O’Key on acquisition of supermarket business

The leading grocery retailers on the Russian market, X5 Retail Group and O’Key Group, announced they have reached an agreement for X5 to acquire O’Key’s supermarket business operating under its eponymous brand. Russia’s Federal Antimonopoly Service (FAS) has approved the deal.

The agreement covers 32 O’Key supermarkets, including 18 in St. Petersburg, four in Moscow, two in Volgograd, and one each in Moscow and Leningrad Provinces, Astrakhan, Voronezh, Lipetsk, Togliatti, Krasnodar and Novocherkassk. Under the terms of the transaction, X5 will also acquire the real estate (supermarket buildings) for 14 stores (13 in St Petersburg and one in Moscow). All these supermarkets will be integrated into X5’s Perekrestok supermarket chain.

X5 CEO Igor Shekhterman said in a statement that the transaction is fully in line with the company’s strategy of strengthening Perekrestok’s position as the leading supermarket chain in Russia. In turn, O’Key Group’s CEO Miodrag Borojevic said that the change in the company’s structure based on this sale will allow the retailer to focus on the core strategic priorities of its business, i.e., efficiency improvement of compact city hypermarkets and accelerating the expansion of its Da! discounters.

It is worth noting that X5’s Perekrestok supermarket chain opened a total of 100 new stores since the beginning of 2017, with the latest launch in Novorossiysk.

As of 30 September 2017, there were 584 Perekrestok stores in Russia.