Romanian retail has few but strategic moves (Deals of the Year)

The Romanian retail market has been characterized this year more by greenfield projects than by takeovers. However, several deals involving large international retailers or investment funds took place.

French retailer Carrefour expanded on the supermarket segment by taking over local supermarket chain Artima from Enterprise Investors. The French retailer paid EUR 55 million for its acquisition on the Romanian market. Artima has 21 stores with 21,000 sqm in western Romania. The supermarket chain is on its second sale. Initially set up by local businessman Florentin Banu in 2001, the chain was bought in 2005 by Enterprise Investors for EUR 17 million.
The deal is a first for Carrefour in Romania. So far, the retailer has focused on opening greenfield stores or revamping existing locations, as was the case with its Unirea store. The retailer is also going for a multi-format market approach and is increasing its presence in the western part of Romania. For the seller the deal is one in a series of exits.
Another deal which involved investment funds as both buyer and seller was the sale of Domo, the IT&C and home appliances retailer. British fund Equest paid EUR 62.5 million for a 75 percent stake in Domo. The Romanian-American Enterprise Fund (RAEF) and Balkan Accession Fund (BAF) were the sellers. Equest Investments Balkan Limited bought the retailer through its subsidiary Lynx Property BV.
After this transaction, Domo Retail will also include Bulgarian retailer Technomarket, which recently entered the Romanian market with a store in Targoviste. Domo has a 116-store network in Romania and reported EUR 125 million sales in the first nine months of this year.
Local holding RTC this year started to sell some of the companies under its umbrella, mainly those which are not a core business for the group. RTC sold its water cooler distributor Aqua Regis for over EUR 1 million to a company active on the same segment, Cumpana. Following the transaction, Cumpana is said to have surpassed a 25 percent market share in Romania.
RTC also sold 40 percent of its game distributor Best Distribution to Greek company, CD Media. The remaining 60 percent will be acquired in the next six months
RTC also sold PayStore, its division of prepaid cards and electronic charge, to British PayPoint. The EUR 15.5 million transaction was sealed in the middle of the year.
RTC has also closed down two other divisions of its business, Depozitul de Vinuri and Depozitul de Legume – Fructe. The holding tried to sell the first companies but failed to reach an agreement. Other companies that Radu has put up for sale are the logistics and transportation company TCE, the software producer Sistec SBSol and more important divisions of the RTC Group, such as the book and stationary chain Diverta.
RTC Holding will cast off three business lines by the end of 2008 and list a package of 25 percent of the group, or some divisions, on the BSE.
The holding says it does not need the money that will be generated by these moves for further development. Instead owner Octavian Radu will spend the cash on personal investments.

Corina Saceanu