Report: MediaMarktSaturn can sell Russian unit to Gutseriyev
MOSCOW, Apr 13 (PRIME) -- Consumer electronics group MediaMarktSaturn is considering options for its Russian operations including selling its retail chain to local retailers M.Video and Eldorado majority owned by businessman Mikhail Gutseriyev, Reuters reported on Friday, citing sources close to the matter.
“Ceconomy (owner of MediaMarktSaturn) is looking for ways to solve their problems in Russia. There are talks with interested parties,” one of the sources said.
The sources added that no decisions have been made.
Ceconomy said in January that one of its priorities for this year was improving its performance in Russia, noting it had already initiated cost savings and store size cuts, adding it was seeking a “strategic answer” by the end of 2018.
The Russian retail market has been recovering from a slump, supported by falling interest rates and slowing inflation, and M.Video’s sales grew 8.2% to 234 billion rubles in 2017 when it opened 27 new stores.
M.Video said in March it would buy Eldorado in a deal expected to close in April–June.
Gutseriyev was in talks to sell a 15% stake in the merged company to Media Saturn and use the proceeds to acquire MediaMarktSaturn’s Russian business, which operates under the MediaMarkt brand, a source at a Russian state bank said.
M.Video declined to comment, while Eldorado was not immediately available for comment and Safmar declined immediate comment. Ceconomy, which split last year from German retail conglomerate Metro, was not available for comment.
One person close to Ceconomy said it has been working on finding a solution for its Russian business, which is subscale and will likely come under more pressure as a result of the M.Video-Eldorado deal.
Ceconomy usually aims for complete control of a business, so any deal involving a minority would likely only be an intermediary step, the person said, adding that a sale to the Russian group may throw up antitrust issues.
Ceconomy’s sales in Russia fell by 7% to 526 million euros in the 2016–2017 financial year as it closed five stores to bring the total to 57.