OREANDA-NEWS. On 1 February 2008  MERCURY Group announces it has closed a transaction to acquire 100% of the beneficial ownership in DIXY Holding Limited, holder of a controlling stake in OJSC DIXY GROUP, from the holding company managing the assets of Oleg Leonov.

Closed Joint-Stock Company “Trade Company Megapolis”, a part of the MERCURY Group, has acquired 100% of the ownership in DIXY Retail Limited (incorporated in British Virgin Islands), the owner of 100% stake in DIXY Holding Limited (incorporated in Cyprus) which, in its turn, holds 50.96% of shares in OJSC DIXY GROUP. The request filed by CJSC “Trade Company Megapolis” with respect to the acquisition was approved by the Federal Antimonopoly Service on January 16, 2008.

Shortly, the Board of Directors of OJSC DIXY GROUP will call OJSC DIXY GROUP shareholders meeting which, among other items on the agenda, will elect a new Board of Directors. Candidates to the Board from MERCURY Group are Igor Kesaev, Sergey Katsiev, Dmitry Rischenko (CFO, MERCURY Group), Ilya Yakubson (Vice President, CJSC “Trade Company Megapolis”), Robert Sasson (independent Director), Valery Bubnov (Deputy General Director, OJSC DIXY GROUP), Toms Berzin (Deputy General Director, OJSC DIXY GROUP). Vitaly Klyuchnikov, former head of the Company business operations in the North Western Federal District, will be the General Director of the Company.

Commenting on closing of the transaction, Oleg Leonov said:
"2007 is the most successful year in the Company's history. This year the Company has completed an US$360 million IPO, significantly improved its position across most operational and financial areas, especially the operating efficiency of the business and logistics, and optimization of the debt burden. The attraction of the Company for the MERCURY Group underscores the high quality of achieved results. I am confident that the experience and resources of the new shareholder will allow the Company to reach even greater heights in its further progress."
MERCURY Group President Igor Kesaev made the following comments: 

"The transaction is of strategic interest to the MERCURY Group. We intend to use our capabilities to create a leading player in the Russian food retail market using the publicly-listed DIXY GROUP as a basis. Meanwhile, the acquisition aims at strengthening our leadership in the FMCG market of Russia. We see DIXY’s strengths which in combination with CJSC Trade Company Megapolis’ capabilities and resources will provide synergies."

The MERCURY Group is a major diversified holding company established in 1991 by Igor Kesaev, President and controlling shareholder of the Group. The Group's 2007 turnover is expected to exceed US$8 billion. Today, the core assets of the Group include:

• Trade Company Megapolis, a largest Russian distributor of FMCG operating throughout the Russian Federation via 270 branches. The company employs over 15,000 staff. 2007 revenues of Megapolis group companies are preliminary estimated at approximately US$5.5 billion.

• Orton Oil, the largest shareholder - together with the Government of Moscow - of Sibir Energy PLC, a vertically integrated oil company.

• Mercury Development, a construction and development company. The largest projects involving Mercury Development include the Mercury City Tower, a multi-purpose building in the Moscow City district (158,000 m2), New Holland, a development project in Saint Petersburg (200,000 m2), and the Crystal Island project, a development project in Moscow (2,000,000 m2).

• OJSC V. A. Degtyarev Works, the maker of civil and military equipment, one of the top twenty in Russia.

• Moscow Wine and Brandy Distillery KiN, a largest brandy producer holding 27% of the Russian market.

DIXY Group is a leading Russian food and grocery retailer. Opening its first store in early 1999 in Moscow, as of December 31, 2007 DIXY was managing a 388-store chain comprising 369 DIXY discounter stores, 8 MEGAMART compact hypermarkets, 7 MINIMART economic supermarkets and 5 V-Mart small convenient stores in the three largest federal districts of the Russian Federation. Unaudited consolidated revenue for 2007 totaled the equivalent of US$1.431 billion. In May 2007, the Company went public with an IPO on RTS and MICEX. The Company's current free float is approximately 48%.