The mobile operator MegaFon and the SLV group of Oleg Malis, the controlling companies of Euroset and Svyaznoy, agreed to merge the two retailers. The joint venture will be controlled by the SLV group, and MegaFon will receive 25% plus 1 share in it. The parties expect to complete the transaction by mid-May.

"MegaFon" and SLV group Oleg Malis signed an agreement on the merger of retail chains "Euroset" and "Svyaznoy", follows from the joint message of the companies. Consolidation takes place on the basis of the Cyprus company Dtsretail, which, according to a press release, belong to the operating companies of the Svyaznoy group. Euroset is owned by Euroset N.V., MegaFon owns it through the subsidiary company Lefbord Investment. Under the agreement, Lefbord Investment will transfer 100% of Euroset N.V. shares. company Dtsretail. As a result, the controlling shareholder of the merged company will be the SLV group, and the MegaFon structure should receive 25% plus one share. Lefbord Investment will also have two seats on the board of directors of the joint venture. The parties expect to complete the transaction by mid-May.

"This deal reflects our strategy. We see a huge potential in the combination of physical retail and online. The merged company is a training platform for our customers, which is an important element of the digitalization of the economy, "said Oleg Malis, the founder and key shareholder of the SLV group.

"We believe that combining with a successful retail network with a strong brand will allow us to better understand the needs of users, as well as improve the quality of service," said Sergei Soldatenkov, MegaFon's CEO. He also expressed confidence that MegaFon will "benefit from working with an experienced and professional team that will manage the combined retail." "We also believe that the unification of Euroset and Svyaznoy is a logical step towards optimizing distribution channels in the mobile market," Sergei Soldatenkov said.

The merger of "Svyaznoy" and "Euroset" will create a company that will manage more than 5 thousand of its own salons, the press release says. As a result of consolidation, the parties expect to launch new products and services, expand partnerships and increase financial performance. "The merged company will continue to actively develop its own online sales platform and implement a strategy for omnichannel development," the report said.

By the end of 2017, the combined company's revenue from online sales amounted to approximately 22 billion rubles.

The shareholders of Svyaznoy and Evroset have been preparing for more than a year to unite the two retailers. As Kommersant wrote in March 2017, it was assumed that this transaction would follow the reorganization of Euroset. In February, 100% of Euroset went into the ownership of MegaFon, and half of the retailer's salons were transferred to Vimpelcom (the Beeline brand).

In the same month, Dtsretail filed a petition with the Federal Antimonopoly Service (FAS) of Russia for the purchase of 100% of the voting shares of Svyaznoy Logistics and the acquisition of rights to determine the conditions for the activities of the four companies of the Euroset group. The FAS agreed this petition in the first ten days of April, issuing an order to ensure competition in the Chukotka Autonomous Okrug.

Optimization of the presence of mobile operators in the retail business is beneficial to all market participants, it was noted in the March review of Uralsib Capital. "We are generally positively considering a scenario in which MegaFon will become a minority shareholder of the merged company based on Svyaznoy and Evroset. First, in this case, MegaFon will not have to consolidate the results of Euroset in its reporting. Secondly, the reduction in the intensity of competition in the market would be beneficial to all its participants, "wrote analysts of Uralsib Capital, Konstantin Chernyshev and Konstantin Belov.

Svyaznoy will unite with Euroset
Vedomosti, 4/29/2018

The SLV Group, the controlling shareholder of Svyaznoy and Megafon, decided to merge the Svyaznoy and Euroset retail chains (100% owned by Megafon). Companies reported on Saturday that they signed an agreement. The unified company "will manage the world's largest retail network in the high-tech segment by the number of its own stores (more than 5000)," the joint report of SLV and Megafon notes.

MTS representative Alexei Merkutov does not agree with Megafon's statement: the operator has 5,700 stores in Russia, Merkutov asserts. True, he does not disclose the ratio of his own salons and open franchises. "Megafon" in its message assures us that it is about their own salons.

Under the terms of the agreement, Lefbord Investment Limited, controlled by Megafon, will transfer 100% of the shares of Euroset N.V. (owns the operating companies of the Euroset group) of the Cyprus company DTSRetail Ltd., which owns the operating companies of Svyaznoy. The controlling shareholder of the merged company will be SLV. Lefbord Investment Limited should receive 25% plus one share and two seats on the board of directors in the combined company, the message says. Other terms of the transaction are not specified in the message. It is planned to be completed by mid-May.

The founder of SLV Oleg Malis, whose words are contained in the message, stressed that the deal reflects the strategy of the group. "We see a huge potential in the combination of physical retail and online. The united company is a training platform for our customers, which is an important element of the process of digitalization of the economy, "he added.

The general director of Megafon, Sergei Soldatenkov, in turn, noted that the merger will make it possible to better understand the needs of users and improve the quality of service.

According to the results of 2017, the revenue from online sales of the combined company amounted to approximately 22 billion rubles, the report said.

Megafon consolidated 100% of Euroset at the end of February 2018. The company bought 50% of the network from VimpelCom (VimpelCom, in turn, bought half of Euroset's retail stores - approximately 1,800 stores). Megafon and SLV reported about negotiations on the merger of Svyaznoy and Euroset in March. Megafon also submitted a petition to the Federal Antimonopoly Service (FAS) for the purchase of Svyaznoy Logistics. The regulator approved it in April.