FAS: ACQUISITION OF SLATA AND KRASNY YAR BY X5 RETAIL GROUP IS POSSIBLE UNDER CERTAIN CONDITIONS

One of them is to ensure the fulfillment of the additional social obligations assumed, aimed at reducing prices for socially important food products

FAS Russia approved applications of X5 Retail Group to acquire 70% of the shares of retail chains owned by the companies of Mayak LLC (supermarket chain Slata) and Smart LLC (grocery stores Krasny Yar), subject to the given remedies.

Thus, in accordance with the remedies issued by FAS Russia, when carrying out the transaction, Corporate Center X5 LLC and Smart LLC must reduce to 35% of the total turnover of food products within the borders of one of the municipalities of the Krasnoyarsk Territory* by October 1, 2023.

The change of ownership should not negatively affect the counterparties of the acquired retail chains. Therefore, FAS Russia prescribed to ensure the fulfillment of all contracts concluded by the acquired companies and additional measures to support food suppliers as part of the fulfillment of additional social obligations assumed.

Besides, FAS Russia ordered to extend voluntary social obligations existing in the organization Corporate Center X5 to the affiliated retail chains. Thus, in Slata and Krasny Yar stores, margins on individual items of food products during the year from the date of transactions will also be set at a level not higher than 10% of the purchase price for some categories of goods** and not higher than 5% for other categories ***.

Compliance with the requirements of antimonopoly regulations will ensure the preservation of competition in the retail markets and increase the availability of socially important food products for citizens. Failure to comply with requirements entails administrative responsibility**** and is the basis for invalidation of the transaction in the court at the request of the antimonopoly authority *****.

Reference:

* The joint share of retail chains from the total turnover of food products may exceed 35% only in one municipality.

** Categories of goods with a margin of no more than 10%: cereals (buckwheat, millet, rice), chilled broiler chicken carcass, pasta, vegetable sunflower oil, wheat flour, fresh frozen herring carcass, salt, tea, apples, chicken eggs.

*** Categories of goods with a margin of no more than 5%: white cabbage, potatoes, beets, onions, kefir, butter, milk, granulated sugar, cottage cheese, white bread.

**** Part 2.3 of Article 19.5 of the Code of Administrative Offences of the Russian Federation

***** Part 5 of Article 34 of the Federal Law of 26.07.2006 No. 135-FZ "On Protection of Competition"