FAS: X5 AND TAMERLAN GROUP RETAIL CHAINS MERGER IS POSSIBLE UNDER CERTAIN CONDITIONS

One of them is the extension of all social price obligations of the X5 group to the purchased retail chains

The competition authority granted X5 Group's request to purchase 100 % of the authorized capital of Tamerlan LLC, provided that remedies of the authority are fulfilled.

By April 10, 2024 Corporate Center X5 LLC and Tamerlan LLC (retail chains "Pokupochka", "PokupALKO", "Ga-ga") should reduce to 35 % the total turnover of food products in municipalities, where it may be exceeded as a result of the deal. At the same time, X5 Group is still possible to sell or transfer outlets to third parties.

The change of ownership should not negatively affect the counterparties of the retail chains owned by Tamerlan LLC. Therefore, the authority ordered to fulfill all contracts concluded by the acquired company. In addition, measures will be taken to simplify the access of socially important food products to the shelf. For a number of food products, retail chains will not impose special requirements on manufacturers for packaging, weight and grade. In addition, suppliers of these products will not have to pay remuneration to stores for their implementation.

Besides, FAS Russia ordered to extend voluntary social obligations existing in the X5 Group organization to the purchased retail chains. Thus, in the stores "Pokupochka", "PokupALKO", "Ga-ga", margins on individual items of food products during the year from the date of the transaction 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 the antimonopoly body will ensure the preservation of competition in the retail markets and increase the availability of socially important food products for citizens. Its non-fulfillment leads to administrative liability*** and is the basis for invalidation of the transaction in court on the claim of the antimonopoly authority****.

For reference:

* Margins at a level not exceeding 10 % of the purchase price will be set for at least one commodity item in each of the categories of goods included in the List of certain types of socially significant essential food products approved by the Decree of the Government of the Russian Federation of 15.07.2010 No. 530, for which maximum permissible retail prices can be set.

** Margins at a level not exceeding 5 % of the purchase price will be set for at least one commodity item in each of the following categories of food products: kefir, drinking milk, butter, cottage cheese, white cabbage, potatoes, onions, carrots, beets, granulated sugar, bread and bakery products.

*** Part 2.3 of Article 19.5 of the Code of Administrative Offences of the Russian Federation of 30.12.2001 No. 195-FZ

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