Business News

Mercator Buying Stores of Hardware Retailer Merkur (adds)

Ljubljana, 05 May (STA) - Slovenia's leading retailer Mercator and a group of managers who took over retailer Merkur in 2007 signed on Wednesday a letter of intent that envisages Mercator buying all of Merkur's technical goods stores, in Slovenia and abroad, both companies confirmed for the STA.

Prior to the acquisition the hardware stores would be spun off from Merkur, which would retain the divisions Mersteel (wholesale of metals) and BigBang (electronics stores), Merkur explained.

The price and the details of the purchase remain confidential, but Mercator hinted it would buy the stores with a combination of cash and newly-issued stock. Mercator is expected to complete due diligence by the end of June.

Unofficial reports about a tie-up between Merkur and Mercator have been circulating for several weeks, with reports suggesting the deal would ease the debt burden of Merfin, the company owned by Merkur's managers, and give Mercator stores in the Balkans.

The Merkur management admitted as much in a statement today, saying that the sale would "diffuse the pressure that no longer makes ownership by a wide circle of managers and employees acceptable."

Mercator already has several technical goods stores in Slovenia and the deal would make it the market leader in this segment. However, it might also raise anti-trust concerns.

Moreover, the acquisition would provide Mercator a fast-track for expansion in its key foreign markets in the Balkans, business daily Finance reported on 29 April.

As Mercator put it in Wednesday's statement, it is already a leading grocer in Southeast Europe and the acquisition would make it a leading hardware retailer as well.

Merkur has 43 stores (30 in Slovenia and 13 abroad, mostly in the former Yugoslav republics), as well as 20 franchises (18 in Slovenia and two abroad).

Merkur's results for 2009 have not yet been released. In 2008 it posted sales of EUR 932m and profit of EUR 26.5m.

Mercator, the biggest retailer in Slovenia and a major player in Southeast Europe, had sales in 2009 of EUR 2.6bn and a profit of EUR 21.1m.

You might be also interested in:


We are here to help you.