The largest seller of household appliances and electronics, M.video, in Russia announced its intention to buy 100% of the second largest network, Eldorado, from its owner, the Safmar group Mikhail Gutseriev. The deal is to be approved by the shareholders' meeting. It will be held on April 13.

December 8, 2016 "Safmar" bought 100% of "Eldorado" from Czech PPF and EMMA Capital. A week later, he announced the acquisition of 57.7% of M.video from its founder and current president Alexander Tynkovan, as well as Pavel Breiv and Mikhail Tynkovan. All "M. Video" for the deal with "Safmar" was then estimated at about $ 1.26 billion. The terms of the deal with "Eldorado" were not disclosed by the parties.

 "Safmar", according to a person close to one of the participants in the transaction, will earn at the merger of the two companies. "Eldorado" cost "Safmar" in 33.36 billion rubles. at the rate of the Central Bank on the day of closing the transaction, it follows from the PPF report for 2016. It turns out that the profit from the sale of the retailer will amount to 12.14 billion rubles. "Obviously, the funds can go to pay off other debts of" Safmar ", - the interlocutor of Vedomosti argues.

Did "Safmaru" for a year with a small possession of "Eldorado" pour own funds into the network - companies do not disclose. If not, and the transaction will be closed immediately after its approval by the shareholders of M.video, the return on investments in the Eldorado of Gutseriev will be 27%. For comparison: since December 8, 2016, the Mossbirge index has grown by only 5.6%.

Such is the specialization of "Safmar", Vedomosti interlocutor continues: "He buys a cheaply stressful asset and then earns it for sale." "When they bought Eldorado, there was a recession, few believed in a revival of demand," the source of Vedomosti continues. - Now a completely different situation. Plus, the company was put in order. "

 From the merger of two electronics sellers by way of, for example, the exchange of shares, it was decided to refuse, knows the person close to one of the participants in the transaction: M.video has a fairly large share of free float, it would be very difficult to exchange shares in the Russian jurisdiction, with considering that minority shareholders may have different views on the deal. "Buying through" M.Video management "is the simplest and quickest way to the goal that all are striving for - to get one legal entity," he argues.

The merged company will remain public, Alexander Tynkovan assured. Shareholders who disagree with the transaction, M. Video will offer to present their shares for redemption - at 401 rubles. a piece. Yesterday at the close of trading on the Moscow stock, the action "M.video" cost 405.9 rubles.

For the transaction, "M. Video" will take a loan of 40 billion rubles. VTB secured 100% of "M.Video management" and trademarks "M.video" and "Eldorado", said the financial director "M.video" Ekaterina Sokolova. In addition, according to the Cyprus registry, the share of the structures of "Safmar" in this retailer is also laid in this state bank. But the debt burden of the combined company will not be critical - the ratio of net debt to EBITDA will be only 1.5, according to company data.

 It is assumed that both brands will be preserved, so that, as chairman of the board of directors M.Video Said Gutseriev hopes, successfully compete with Russian and foreign networks and online retail. But the main brand will be "M. Video", said the chief executive director of M.video, Enrique Fernandez. And "Eldorado", he said, will specialize in the budget segment: focus on promotional offers and affordable goods.

Retail sales of machinery and electronics are a complicated business, says Raiffeisenbank senior analyst Natalia Kolupaeva: there is high competition, relatively low level of profitability. In the long term, it remains an open question how successfully the combined company will be able to compete with large online players - not only foreign, like Alibaba, but also Russian ones, like Ozon, she notes. On the other hand, "M.video" focused on online sales, and offline stores are becoming an addition to online sales, notes Maria Kolbina of VTB Capital. "M.video has some of the most effective and interesting opportunities for online development," the analyst notes.