Lenta, one of the largest multi-format retail chains in Russia, has unveiled plans to acquire online-retailer Utkonos to create a leading e-grocery platform covering all key shopping missions and market segments. The sale is structured as the purchase of the entire participation interest of LLC “Noviy Impuls-50” from Severgroup LLC. The base purchase price for the transaction is €240m (RUB 20bn). The acquisition of Utkonos will enable Lenta to significantly expand its online market share with an additional delivery platform featuring a loyal customer base, unique competencies and competitive advantages and the ability to compete in the Moscow online market more effectively, especially within the upper-middle and premium segments.
Utkonos is an online-only food retailer based in Moscow and is a pioneer of the e-grocery segment in Russia. In 2020, Utkonos’ share of the Moscow e-grocery market amounted to approximately 10%. Outside Moscow and Moscow region, Utkonos also delivers orders in the cities of Kaluga, Tver, and Tula. Currently, Utkonos operates two wholly-owned warehouse dark stores totalling 80,000m² and two rented dark stores totalling 21,000m², located in Moscow and Moscow region. The company utilizes its own logistics and fulfilment infrastructure consisting of 920 vehicles.
Utkonos unique assortment constitutes more than 85 thousand SKUs with the widest fresh assortment amongst online and offline food retailers in Russia. Utkonos offers affordable goods of the highest quality under six own brands, with a total assortment of private-label goods of more than 400 SKUs. Utkonos customers can place orders through the website or via a convenient mobile application. During 9M 2021, Utkonos had more than 330,000 customers.
Vladimir Sorokin, Lenta Chief Executive Officer, commented: "The acquisition of Utkonos enables Lenta to significantly enhance our online competitiveness in Moscow with an additional delivery platform featuring a loyal customer base, unique competencies, such as ultra-wide unique assortment, strong fulfilment infrastructure and high client satisfaction rates. Together, Lenta Online and Utkonos will create a comprehensive online offering covering all key shopping missions and market segments. This deal is closely aligned with Lenta's strategic priorities, which we determined and announced earlier this year. The acquisition of Utkonos will allow Lenta to grow our online business and overall food retail business in Moscow, which is one of our strategic regions where we chose to compete. Utkonos will become part of Lenta's online business division. The combined online business unit will retain unique competencies and teams inherent to the Lenta Online and Utkonos brands. Together with Utkonos, we will be able to provide the full scope of online delivery services, from express delivery from our Mini Lenta convenience and supermarkets to planned or scheduled delivery from Utkonos dark stores. We see a strong cultural fit between Utkonos and Lenta Online and are pleased to welcome over 5,200 new colleagues from Utkonos to the Lenta family.”
Steve Johnson, Lenta Senior Independent Director, added: “Online is an important element of Lenta’s strategy and the acquisition of Utkonos is in line with the Company’s strategic goal to reach 10% share of Russian e-grocery market by 2025. As the Chairman of the Special Committee, I can confirm that we have carefully reviewed the investment proposal taking into account the independent valuation and the fairness opinion that was rendered to the Special Committee. As such, we believe this transaction will bring additional value for all of Lenta’s stakeholders.”
