Nov 5 (Reuters) – Polish e-commerce group Allegro has agreed to buy Czech online retailer Mall Group for 881 million euros ($1.02 billion) to create a regional platform, sending its shares up as much as 11%.
Allegro announced late on Thursday that it would acquire the e-commerce assets of Mall Group and the logistics assets of WE|DO from Jakub Havrlant’s Rockaway Capital investment group, PPF Group and Daniel Kretinsky and Patrik Tkac’s EC Investments.
Allegro’s shares, which have fallen more than 40% this year amid competition jitters in its home market, were up 11% at 1234 GMT.
« Buyers will benefit from the improved selection, price and convenience, while a joint base of around 135,000 merchants will be able to ‘list once, sell everywhere’, » Allegro Chief Executive Francois Nuyts said in a statement.
Operating across the Czech Republic, Slovakia, Hungary, Slovenia, Croatia and Poland, the merged company will almost double its target retail market to 1.14 trillion zlotys ($285 billion) and 70 million people, Allegro said.
« It (the deal) doubles the headroom for growth, and that means that all the innovations we’re doing can scale much better and reach much more consumers, Nuyts told the media call.
« Mall Group operates in underpenetrated and fragmented markets, and there is a clear opportunity to drive growth via the marketplace. Allegro pays a good price for all of that, especially as the stock portion has been locked in 26% above yesterday’s closing price, » Ivan Kim from Xtellus Capital said.
Under the deal the Polish company, which plans to have about 3,000 of parcel lockers by the end of 2022, gets access to WE|DO’s 1,100 pick-up points and lockers, it said in a presentation.
« The WE|DO acquisition today skyrockets Allegro’s capabilities in cross-border fulfilment and last-mile logistics, a capability which it lacked, but ever wanted to expand, » Sebastian Patulea from Jefferies wrote in a comment to Reuters.
The final price might be increased by up to 50 million euros based on specific short-term objectives and the deal is expected to close in the second half of 2022.
The deal will be financed through a stock-and-cash consideration, Allegro said.
($1 = 0.8655 euros)
($1 = 3.9940 zlotys)
Reporting by Anna Pruchnicka in Gdansk; Editing by Sherry Jacob-Phillips and Louise Heavens
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