MOSCOW (Reuters) - Russia’s second-biggest food retailer Magnit (MGNT.MM) said on Wednesday it had began talks with its new shareholder Marathon Group over the acquisition of pharmaceutical distributor SIA.
Magnit said it was initiating due diligence on SIA and that the possible deal was part of its plans to expand into the retail pharmacy market.
The company began to open pharmacies last year and the pilot project has demonstrated good results, it said on Wednesday.
“Pharmacies and food stores are mutual drivers of customer traffic, which should provide a multiplier economic effect,” Magnit Chief Executive Khachatur Pombukhchan said.
SIA Group is part of Marathon Pharma group, a subsidiary of Marathon Group, which last month bought an 11.82 percent stake in Magnit from VTB (VTBR.MM).
Elena Naumova, an executive director of Magnit, told reporters the acquisition would be a cash deal and she hoped it would close in 2018.
She declined to provide any financial details of the planned transaction. SIA turned over 66 billion roubles ($1.06 billion)in 2017, according to market research firm DSM Group.
Shares in Magnit fell 3 percent on the Moscow Exchange and were down 6 percent in London (MGNTq.L).
Reporting by Maria Kiselyova and Olga Sichkar; Editing by Alexandra Hudson