Ceconomy, MediaMarkt's parent company, has sold its onerous Russian division to local electronics chain M.video. The German electronics giant does not quit Russia altogether however, as it continues as shareholder of M.video.
Ceconomy pays M.video a handsome, but undisclosed amount so that the Russians take over the 46 local MediaMarkt stores and for a participation of 15 % in the Russian chain.This way, Ceconomy avoids an expensive 'hard exit' from the Russian market.
In German Handelsblatt, Ceconomy CEO Pieter Haas says this a fair deal: "We have never been able to be the leading force in Russia on our own, so we have searched - and found - a good alternative." With its huge population and high growth figures, Russia continues to be very interesting, Haas says.
M.video has a Russian market share of 26 % after the recent acquisition of its competitor Eldorado. It is part of billionaire Mikhail Gutseriev's Safmar holding.