The group "Safmar" Mikhail Gutseriev acquires control in the Russian network of home appliances and electronics Media Markt, the German company said. Simultaneously, the German company buys 15% of the "M.video" network belonging to "Safmar".

The representative of M.video re-addressed questions about the deal with Media Markt to the representative of Safmar. He confirmed the deal, refusing additional comments.

The cost of buying a share in M.video will be 258 million euros, it follows from the materials of the German company. At the same time, she will give "Safmaru" the Russian chain of stores Media Markt. As stated in the press release of the German group, the transaction value can be reduced to the amount of up to 86 million euros, depending on the implementation of "M. Video" targets for profits before taxes (EBITDA) in 2018 and 2019.

According to the source of Vedomosti, close to the deal, the total amount of the transaction will be $ 470 million. According to the source, when assessing the transaction, the German company proceeded from the market value of M.video at $ 3.13 billion.

The parties expect that the deal will be completed no later than September 2018, the report said.

 As a result, after closing the deal, 42.7% of M.Video (now 57.7%) may remain with Safmar, free circulation will be 42.3%, taking into account pension funds and other investors, the presentation of the German company says.

The fact that German Media-Saturn-Holding is negotiating with M.video about the sale of Russian business to Media Markt and the purchase of a share in M.video became known in April 2018.

For the German company, the Russian market was problematic. It could not take a leading position after entering Russia in 2006. And after the devaluation of the ruble at the end of 2014 and the downturn in the market, the retailer began to reduce the retail network. For the 2016/17 fiscal year, the Media Markt network in Russia fell by five points, at the beginning of October 2017 it had 57 stores. The company's turnover also fell: from 53.6 billion rubles. in 2014, according to SPARK-Interfax, to about 40 billion rubles. in the past year, according to Infoline analysts. The accumulated loss of Russian Media Markt over the past five years, analysts estimated in excess of 13 billion rubles.

The deal will allow the German company to remain on the Russian market and become a strategically important shareholder in the company, the market leader, says Peter Haas, CEO of Media-Saturn-Holding (his words appear in the message). The combined company M.video and Eldorado, according to their own data, now has 25.9% of the household appliances and electronics market in Russia. Media Markt has only 3.3%.

As stated in the presentation of the German company, she studied the option of leaving the Russian market, but the transaction with "Safmar" seemed to her more attractive option.

The group "Safmar" as a result of a deal with a German company acquires the fourth large chain of hardware and electronics stores in the last few years.

In 2016, the group "Bin" (formerly known as "Safmar") bought MDM Bank, along with which the Technosila network was acquired. At the end of 2016 the group bought 100% of "Eldorado" from Czech PPF and Emma Capital. A week later the group announced the purchase of M.Video from its founders Alexander and Mikhail Tynkovanov and Pavel Breev.