X5 Retail Group, the country’s largest food retailer by revenue, applied for regulatory approval Friday to buy local supermarket chain Paterson, an official at the Federal Anti-Monopoly Service said.
The official said X5 sought permission to buy into Paterson — an 80-store chain with 2008 revenues of 14 billion rubles ($465.7 million).
“X5 always looks at M&A opportunities as part of the long-term consolidation of the retail sector. The company from time to time conducts preliminary discussions with many companies. Paterson is one example,” X5 chief executive Lev Khasis said in e-mailed comments.
Two banking sources and a source close to Paterson said X5 has been in talks to acquire Paterson since the beginning of 2009 and is currently discussing with its owners a part-cash, part-equity deal.
One banking source said the sides had signed a memorandum of understanding, but that it was too early to talk in detail about the deal.
X5 confirmed that it had submitted the request with the regulator, but refused to comment on what it said were “preliminary negotiations.”
“Submission of an application to the anti-trust authorities is a purely technical step, required to determine whether there are any regulatory issues to proceeding with negotiations,” Khasis said.
X5, part of billionaire Mikhail Fridman’s empire Alfa Group, had sales of about $9 billion in 2008.
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