Anadolu Group offers 1.8 billion liras for local supermarket giant

ISTANBUL

Migros has 1,129 stores at various sizes across Turkey, The profits of the supermarket chain, largely owned by London-based BC Partners, hit 42 million Turkish Liras in the first half of last year.

Turkey’s Anadolu Group has offered 1.8 billion Turkish Liras to buy a 40.25 percent stake in supermarket chain Migros, marking a new growth area for the conglomerate and lifting the retailer’s shares more than 10 percent.

Migros said in a statement addressed to the Istanbul Stock Exchange late on Oct. 2 that Anadolu had offered the private equity group BC Partners 26 lira ($11.44) per share. This is a premium of 36 percent to Migros’ closing share price on Oct. 2, giving it a market capitalization of 3.4 billion Turkish liras ($1.5 billion).

The offer was made by Anadolu Industry, the group’s holding company. “We see Migros as an enterprise that could grow our business in Turkey and in countries in the region. This initiative should be understood as a growth strategy for a new sector,” Tuncay Özilhan, chairman of Anadolu Group, told Reuters.

He denied the group was seeking a distribution channel for the shrinking beer business.  “Migros only has a 4 percent share in [Anadolu beer unit] Efes sales,” he said.  “We would not pay such a high amount just for this.”

Anadolu OK with debts

Özilhan also said his company would finance some of Migros’s debts in case of an acquisition. He also noted Anadolu’s bid for a partnership in controlling stakes.  The chain has 1,129 stores across Turkey and holds a 14 percent market share.

It made 42 million liras in profits in the first half of the year.

Anadolu already owns Ekomini, a retail market chain it acquired in 2012. Ekomini, which is smaller than Migros, has 1,000 stores across Turkey. Anadolu Efes, the company’s most famous beer brand, has faced setbacks in its main markets in Turkey and Russia due to legal regulations. Anadolu Efes announced it would shut down its Lüleburgaz factory in the northwestern province of Kırklareli, four months after closing two breweries in Russia.

London-based BC Partners, a private equity group that owns about 80 percent of Migros, had entered into informal negotiations to sell the chain over the years. However, a slowdown in the Turkish economy and fall in value of the lira against the dollar made it difficult, according to the Financial Times.

BC Partners bought Migros in 2008 for $3.25 billion with the help of Turkey’s Turkven and Italy’s DeA Capital, beating a joint bid by their larger rival Blackstone and the Croatian food group Agrokor.