OREANDA-NEWS. MERCURY Group on December 5 announced that it reached an agreement in principle 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.
 
The parties have agreed that Closed Joint-Stock Company "Trade Company Megapolis", which is a part of the MERCURY Group, will acquire 100% of the ownership in DIXY Retail Limited (British Virgin Islands), owner of 100% stake in DIXY Holding Limited (Cyprus) which, in its turn, holds 50.96% of shares in OJSC DIXY GROUP. The transaction will be subject to the approval by the Federal Antimonopoly Service and to a number of closing conditions.
 
Closing is to take place on or before February 1, 2008. Following the closing of the transaction (and consequent receipt of approvals by Shareholders of OJSC DIXY GROUP), representatives of MERCURY Group will be brought onto the Board of Directors of OJSC DIXY GROUP.
 
Oleg Leonov, Chairman of the Board of Directors of OJSC DIXY GROUP, commented as follows on the reached agreements:
 
"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." 
 
Sergey Katsiev, First Vice President of MERCURY Group and President of MEGAPOLIS, made the following comments:
 
"Investments in the Russian retail sector are 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. We highly value the achievements of the Company's management team and are certain that we are acquiring a high-quality asset. We plan to retain the
existing personnel and ensure the continuity of the Company's policies while allowing it to grow faster. I have no doubt that the Company has a great future."
 
Advisers in the transaction include Jus Aureum Law Offices (buy-side), Renaissance Capital (financial advisor on the sell-side) and Skadden, Arps, Slate, Meagher & Flom LLP (sell-side).
 
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. The core assets of the Group currently 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 the 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 m ), New Holland, a development project in Saint Petersburg (200,000 m ), and the Crystal Island project, a development project in Moscow (2,000,000 m ).
 
•  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.