Hogan Lovells Advises X5 Retail Group on $1.65 Billion Acquisition

MOSCOW, 6 December 2010 – A Hogan Lovells cross border team of lawyers advised X5 Retail Group N.V., the retail branch of Alfa Group and Russia's largest retailer in terms of sales, on the acquisition of the Kopeyka retail chain for a total of RUR51.5 billion (US$1.65 billion), the biggest ever acquisition in the Russian retail sector. Partly financed by a RUR30 billion (US$1.0 billion) loan from OAO Sberbank and X5's existing credit lines, the deal was announced on 6 December and is expected to close by the end of the month.

Kopeyka is the number three soft discounter in the Russian food retail market in terms of revenue and number of stores, operating 660 stores in the European part of Russia. The acquisition of Kopeyka reinforces X5's position as the leading retailer in Russia.

The transaction further strengthens Hogan Lovells relationship with X5 across a number of jurisdictions and practice areas. In recent years Hogan Lovells advised X5 on the acquisition of Paterson supermarket chain in Russia; assisted X5 in the launch of its e-commerce business in Russia; helped manage X5’s IP portfolio including its top brands; and worked on the implementation of a call option agreement relating to the purchase of Karusel, a Russian hypermarket chain, for approximately US$1 billion in 2008.

Corporate co-head and Managing Partner in Moscow, Oxana Balayan, said, "Once again, it has been a pleasure working with X5 on another strategically important acquisition. Hogan Lovells' ability to draw on the combined resources of its predecessor firms and assemble a cross-practice, multi-jurisdictional team to advise on this deal was crucial in getting the deal done."

The team was led by Moscow partner Oxana Balayan and senior counsel Richard Cowie, with support from London partner Karen Hughes (Tax), London associate Matthew Legg (Tax), Moscow counsel Maria Baeva (Corporate) and Taras Oksyuk (head of Real Estate), and Moscow associates Shamil Sadykov (Real Estate), Bourn Collier (Corporate), Alexey Shmelev (Corporate), and Peter Khokhlov (Corporate), with support from lawyers from other practice areas in Moscow, London, and Amsterdam.

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