M&A activity in FMCG sector in Russia down 70% in 2009

2010-08-17

The number of mergers and acquisitions in the FMCG sector in Russia dropped by 70% year on year in 2009, according to the information agency InfoLine. The only major deal was the acquisition of the Paterson grocery chain by X5 Retail Group, a deal estimated to be worth $189m.
This year is expected to be similar with few deals expected. Small regional chains in particular do not appear to be a sufficiently attractive acquisition target for the larger Russian and international retailers, suggests InfoLine.
However, 2009 did see a number of ownership changes among Russian retailers. This was due largely to the fact that many Russian retailers and their shareholders were taking out loans during the period 2006-2008. Once the crisis set in though, many of these same parties were not able to service the loans they had taken out and many assets on the Russian retail market fell into the hands of banks. Mosmart, Alpi and Lenta are all examples of retailers whose stakes came under ownership of banks last year as a result of a failure to repay debts.