Auchan leaves Russia: local buyer found for subsidiary
Pravda Ukraine
One of the few French companies still active in Russia, Auchan, has found a local buyer for its Russian branch to depart the country and proceeded to the last round of negotiations.
Source: La Lettre
Details: According to La Lettre, the Mulliez network is finalising negotiations with a local buyer to sell its Russian branch. The buyer’s name has not been announced, but the transaction may be signed in the coming weeks.
However, the company has yet to obtain approval from Russian government commissions. These commissions grant approval to sell foreign assets, frequently attempting to reduce the price in favour of domestic purchasers, who are typically connected to the Kremlin.
Auchan has also made a political decision to remain in Ukraine, where the French retailer operates 43 locations, half of which are hypermarkets.
Russia accounts for around 10% of the Auchan Group’s revenue, or more than €3 billion. Sales in Russia and Ukraine plummeted 4.2% last year, affecting Auchan’s overall performance, which fell 2%; without these countries, growth would be 4%. This exacerbated the situation, resulting in a net loss of €378 million for the year.
Mulliez hopes that the disengagement from Russia would not be disastrous. If the company sells solely its assets, the Russian division will bring less than €200 million. However, each of the 94 hypermarkets and 138 supermarkets is sold with the buildings, greatly raising the price.
Auchan is in a hurry to sell since the Kremlin’s “exit tax” has risen from 10% to 15% and could reach 35%, according to the Russian edition of RBC.
Background: A deal has been reached for Ceetrus, a member of the Auchan hypermarket chain in France, to sell its holdings in Russia.
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