15th Apr 2005 07:08
Dixons Group PLC15 April 2005 RNSPR/23/05Strictly embargoed until 7.00am BST, 15 April 2005 DIXONS GROUP AND ELDORADO GROUP SIGN CO-OPERATION AND CALL OPTION AGREEMENT Dixons Group plc, Europe's leading specialist electrical retailer, andEldorado Group, the leading specialist retailer of consumer electronics anddomestic appliances in Russia and Ukraine, today announce the signing of a longterm co-operation and call option agreement. Under the agreement Dixons Group will have the exclusive right - but not theobligation - to take control of Eldorado Group before 2011. This right issubject to Dixons Group exercising its option to acquire an initial 10% of theequity of Eldorado before 2008. The price for 100% of the equity of EldoradoGroup is fixed at US$1,900 million. If Dixons Group exercises its right to takefull control of Eldorado Group, an element of the payment for the equity will bedeferred until two years after taking control. John Clare, Chief Executive of Dixons Group, said: "This is a great opportunityfor the Dixons Group and is consistent with our growth strategy. Russia is amarket with enormous potential and Eldorado Group is the ideal strategicpartner. It has a clear leadership position in the market, a strong managementteam with impressive retail skills and an exceptional track record of rapid,profitable growth. By entering into this agreement we will work closely withEldorado Group management to develop a better understanding of the Russianmarket before committing the group financially. This agreement has the potentialto bring substantial benefits to the shareholders, employees and customers ofboth businesses." Igor Yakovlev, founder and president of Eldorado Group, said: "We are veryenthusiastic about the partnership with Dixons Group. We will benefit enormouslyby leveraging Dixons Group's pan-European experience, scale and best practices.Close co-operation with the leading specialist electrical retailer in Europewill enable us to accelerate Eldorado Group's ambitious growth plans andgenerate opportunities for both parties." Eldorado Group has an estimated market share of 22% in Russia. It is also themarket leader in Ukraine and the largest retailer in Russia irrespective ofsector. It has grown rapidly since it was founded ten years ago and haswell-developed plans for future growth, including plans for a significantincrease in the number of stores across Russia and Ukraine. Eldorado focuses onmodern store concepts, a wide product range and customer service. It trades from610 stores covering all regions of Russia and Ukraine, 320 of which are operatedby franchisees. The total selling space, excluding the franchise stores, is235,000m(2) (2.5 million sq ft). Eldorado Group's unaudited sales in the year to31 December 2004 were US$2,471 million (£1,307 million). This represented an 83%increase over the previous year. Eldorado Group and Dixons Group have already started to work together for thebenefit of both parties, for example, in the fields of buying and consumercredit. This co-operation will intensify in the coming months. The companieswill work together through a steering committee, senior management secondmentsand participation in initiatives of mutual interest. If Dixons Group takes upits option, it will be entitled to board representation proportional to itsinterest in the share capital of Eldorado Group. Both Dixons Group and Eldorado Group will benefit from enhanced sourcing andbuying opportunities and a two-way transfer of ideas and best practices. Theagreement gives Dixons Group the option to bring a fast-growing and profitablebusiness into the Group and lead the market in Russia and Ukraine. DixonsGroup's pan-European scale and experience will be important to Eldorado Group inits continuing drive for profitable growth. - ENDS - More information: Dixons Group Media relations Hamish Thompson +44 (0) 1727 203195 / +44 (0) 7702 684290 Investor relations David Lloyd-Seed +44 (0) 1727 205 065 / +44 (0) 7779 574 780 Citigroup Ian Hart +44 (0) 20 7986 4000 Exchange rate: USD 1.89 / STG About Dixons GroupDixons Group is Europe's leading specialist electrical retailer. The Groupoperates two divisions, mixed electricals and computing and communications, in14 countries. It trades through more than 1,400 stores across the UK, Ireland,the Nordic countries, France, Spain, Italy, Hungary, the Czech Republic andGreece. The Group's retail brands include Dixons, Currys and PC World in the UKand Ireland, The Link in the UK, Elkjop in the Nordic countries, PC City inSpain, France, Italy and Sweden, UniEuro in Italy, Electro World in Hungary andthe Czech Republic and Kotsovolos in Greece. The Group specialises in the saleof high technology consumer electronics, personal computers, domesticappliances, communication products and related financial and after salesservices. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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