Russia’s retail major Magnit is finishing negotiations on the purchase of SIA Group, one of the five biggest pharmaceutical distributors in the country, using its own shares for the transaction, according to RBC.
The transaction will be closed after obtaining consent from the Federal Antimonopoly Service. Further consultations on the transaction were conducted by Bank of America, Merrill Lynch, and JP Morgan. It will be paid for with shares of Magnit with a 3-year resale limit.
The company’s executives also approved an increase in the total amount of funds allocated for the repurchase of shares under the buyback program by $86 billion rubles to $336 billion, Magnit said.
SIA Group is part of Marathon Group, which by the end of the spring bought 11.82% of the shares of Magnit from VTB. On Thursday, trading in Magnit shares jumped on the Moscow Stock Exchange and closed at $58.12 per share.
The issue of acquiring SIA Group was thoroughly considered by the chiefs’ board over four sessions, said Paul Foley, deputy head of the Magnit’s executive board.
In turn, Marathon Group is committed to not trade with the Magnit shares acquired in the transaction for a three-year period.
Pharmaceutical distributor SIA Group, as indicated on its website, has 39 regional representative offices. Experts predict that synergy with the AIA will bring “Magnit” a slight increase in revenue – by 3-4%.