Case study

15 stores of Konzum and Mercator have been acquired by Metss d.o.o.

Konzum d.d. has sold 15 Konzum/Mercator stores to Metss d.o.o. for an undisclosed consideration.

The business unit of the retail network under Konzum and Mercator brands consists of 15 stores located in North-Western Croatia, namely in Čakovec – Međimurje and Varaždin Counties.

Metss d.o.o. is the leading retailer in North-Western Croatia with aggressive growth over the recent years, mainly through acquisitions. It operates predominantly through convenient store and supermarket formats. The company is owned by Čakovečki mlinovi, one of the leading Croatian flour and bakery producers.

Konzum d.d. is the biggest fast-moving consumer goods (FMCG) retail chain in Croatia with more than 700 stores and market share between 35–40%. It also has a strong presence in the key neighboring markets such as Serbia and Bosnia & Herzegovina. Moreover, after the acquisition of Mercator, it became the leading regional retailer. The group operates in various retail formats: hypermarket, supermarket and convenient stores.

Oaklins' team in Croatia acted as the exclusive advisor to the seller in this transaction.

Agrokor from Zagreb is the largest company in Croatia, which has developed its operations in Croatia, Serbia, Bosnia & Herzegovina, Slovenia and Macedonia. The largest company within the holding and the backbone of Agrokor is Konzum, the biggest regional food retailer. Apart from Konzum, Agrokor owns some of the leading food manufacturers and brands in the region: Ledo (regional leader in ice cream and frozen food), Jamnica (regional leader in spring and mineral water), Zvijezda (regional leader in oil and margarine), PIK (leader in processed meat) and Belje (the largest agricultural producer). Following Agrokor's acquisition of Mercator, a Slovenian food retailer which had a strong presence in Croatia as well, Croatian Competition Agency (AZTN) ordered Agrokor to decrease a combined concentration of Konzum and Mercator stores in the Croatian market. According to AZTN's resolution, Agrokor had to divest over 90 stores with combined revenues of more than US$160 million.

Our Croatian team was chosen by Agrokor as the exclusive advisor and coordinator of the entire divestment process. Strict requirements imposed by AZTN on one side and ambitious goals of the client on the other, combined with tight deadlines, made the team's task very demanding and consumed a lot of internal resources. AZTN ruled that all stores had to be offered publicly to allow any interested bidder from the industry to participate in the process. Oaklins' team in Croatia had to coordinate a multitude of interested parties with competing interests for different number and combination of stores, at the same time taking care of AZTN’s imposed obligation to favor direct over indirect competitors. The fact that some stores were owned by Konzum, some by Mercator and some were rented from third parties, added up to the complexity of the transaction in respect to the valuation, due diligence, documentation preparation, negotiations and transactions’ structuring. The team managed to preserve the client’s best interests throughout the process, coordinating a multitude of stakeholders and fully complying with AZTN’s resolution.

Tombstone image for 15 stores of Konzum and Mercator have been acquired by Metss d.o.o.

Key deal contacts

Željko Perić

Croatia

Principal

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