Svyaznoy’s Merger with Euroset

Debevoise & Plimpton LLP has advised PJSC MegaFon (“MegaFon”) in its recently completed transaction with SLV Group (“SLV”) to merge the Svyaznoy and Euroset retail chains.

Public Joint Stock Company “MegaFon” (LSE: MFON), a pan-Russian operator of digital opportunities, which owns 100% of shares of Euroset Group and SLV Group, the controlling shareholder of Svyaznoy Group, today announced their agreement to merge Svyaznoy and Euroset retail chains. SLV will become the controlling shareholder of the merged company, with PJSC MegaFon obtaining a minority share.

he Combined Company will operate the largest retail chain1 worldwide in the technology sector by number of stores (more than 5,000) with the mission of increasing the accessibility and consumer understanding of modern high-tech products. For this purpose, more than 30,000 sales consultants will help customers to increase their knowledge of the world of high technologies. The daily footprint in the stores of the Combined Company exceeds two million customers.

Under the terms of the agreement, Lefbord Investment Limited, a wholly-owned subsidiary of MegaFon, will contribute its 100% interest in Euroset Holding N.V., which owns the operating companies of Euroset, to DTSRetail LTD, a Cyprus company, which will own the operating companies of Svyaznoy. As a result, Lefbord Investment Limited will receive a 25% plus 1 share interest and 2 seats on the Board of Directors of the Combined Company. The parties expect to complete the transaction by mid-May.

The merger of two leading players in the technology retail market creates additional growth opportunities. The Combined Company aims to launch new products and services, expand business relationships and improve financial performance. The Combined Company will continue to actively develop its own online platform and implement a strategy for omnichannel development. At the end of 2017, revenues from online sales of the combined company amounted to approximately 22 billion rubles.

The Debevoise team advising MegaFon was led by Moscow-based international counsel Maxim A. Kuleshov (Picture), and included associates Oleg V. Semenov and Tamara S. Kulyk.

Involved fees earner: Maxim Kuleshov – Debevoise & Plimpton; Oleg Semenov – Debevoise & Plimpton; Tamara Kulyk – Debevoise & Plimpton;

Law Firms: Debevoise & Plimpton;

Clients: MegaFon PJSC;