Russian retailer Lenta plans to buy O’Key Group: Izvestia

Russian retailer Lenta plans to buy O’Key Group: Izvestia

Russian retailer Lenta is reportedly considering the acquisition of OK hypermarkets, according to sources close to the deal. The potential transaction is at a non-binding offer (NBO) stage, with discussions focusing on defining the terms between the seller and buyer. Experts estimate the deal's value at 40-55 billion rubles [1].

Lenta, owned by Alexey Mordashov's Severgroup, is interested in expanding its presence in the hypermarket segment, while OK will focus on the discounter format. The deal, however, must be approved by the Board of Directors of OK Group before it can proceed [1].

OK Group, one of the largest food chains in Russia, has seen a decline in popularity and weak growth dynamics in its hypermarket segment compared to its discounter division. The company's revenue reached 219.4 billion rubles in 2024, a 5.5% increase from the previous year, with a net profit of 2 billion rubles [1].

Lenta, on the other hand, has been expanding rapidly, with its revenue under IFRS in 2024 reaching 888.3 billion rubles, a 44% increase from the previous year. The company's net profit was 24.5 billion rubles, up from a loss of 1.8 billion in 2023 [1].

The acquisition of OK hypermarkets aligns with Lenta's growth strategy, which includes active M&A transactions. The deal is expected to increase Lenta's revenue by about 140-150 billion rubles and strengthen its position in the Russian retail market [1].

Market participants have been anticipating this agreement for some time, with no other applicants for the purchase of hypermarkets on the Russian market. The sale of hypermarkets to an outside investor will be possible only after the withdrawal of stores from the perimeter of the OK Group, which is expected to happen no earlier than 2026 [1].

References:
[1] https://iz.ru/en/node/1943268