Allegro, one of the largest European e-commerce platforms, will take over the Czech e-commerce leader Mall Group and the WeDo logistics company. The Polish giant will pay €881 million for the deal. The value of the transaction is €925 million, but debt and other such items are deducted from the price. The selling party includes PPF Group, Rockaway Capital, and EC Investments.
The final price can be further increased by up to €50 million, depending on the performance of the Mall Group.
This is the fifth largest sale of a Czech company or a stake in it to foreign hands in the last ten years in terms of the transaction value.
The emerging group will include 135,000 merchants who use the Allegro or Mall Group platforms. Mall Group puts the total value of the retail market in Central and Eastern Europe, where the group will operate, at €250 billion.
Allegro will have 100 percent control over the Czech companies, but their current shareholders can acquire a stake in the newly emerging group as part of the transaction.
“As shareholders of the joint group, we will contribute to its further growth,” expects Rockaway Capital founder Jakub Havrlant.
The deal is subject to antitrust clearance in the countries concerned and is expected to close in the first half of next year.
This spring, there was speculation that Mall Group shares could appear on the stock exchange, but shareholders eventually preferred the transaction with Allegro. Havrlant himself confirmed this at a press conference last Friday. He also stated that the first contact with the Polish company took place more than a year ago and gradually developed into takeover negotiations.
Investors responded positively to the news. The shares of the Allegro group, which have been traded on the Warsaw Stock Exchange since last year, strengthened by more than 10 percent on Friday. The market value of the company thus exceeded 50 billion zlotys (€10.8 billion).
However, Allegro’s stock value is still about 40 percent in the red compared to the beginning of the year. Among other things, this year’s entry of Amazon into the Polish market contributed to the stark decline.
Through the acquisition of Mall Group, the company will expand into the Czech, Slovak, Hungarian, Slovenian, and Croatian markets.