Hungarian billionaire buys foreign retail chain in Hungary

French retail chain Auchan is now under Hungarian ownership in the country. It is currently the ninth largest retail chain in Hungary. The Hungarian Indotek Group has now acquired a 47% stake in the chain. Group founder-owner Daniel Jellinek believes it is realistic for Auchan to become a top 3 player in five to six years under their ownership.

Auchan under Hungarian ownership

The short-term changes will not affect the operational management of Auchan. However, Indotek will be involved in strategic decisions. Plans include leveraging the synergies between Auchan and Indotek, as well as their real estate experience and retail network, to open new stores in the future, with a particular focus on rural cities, according to a statement to Index.

“Following the signing of the contract, the transaction was notified to the European Union’s Competition Authority in accordance with the legal requirements, as the consolidated turnover of both parties involved in the deal, i.e. Auchan and Indotek Group, justified this,” Indotek told Economx. Jellinek said that the group has entered the retail market in an increasing number of European countries in recent years, with its investments increasingly open to the agri-food sector.

Now 9th, Auchan plans to become 3rd in 5-6 years

A significant element of this opening was the acquisition of a 47% stake in Auchan Magyarország Ltd, a financial investor in the Hungarian department store operator. The Indotek Group also purchased the the company owning 100% of the retail premises in the shopping area of Auchan stores.

“Our plan is to become the 3rd largest player in the market in terms of market share within five to six years, as we have the capital and presence to do so after the transaction closes,”

Jellinek said. By comparison, Lidl is currently the leader in terms of sales, with SPAR and Tesco following. But for now, Auchan is overtaken by Coop, CBA, Aldi, Penny and even Reál. This means that from ninth position, they would race up to third by 2028-2029.

The competition aspects are still to be clarified. Following a notification to the European Union’s Competition Authority, a procedure is pending, which has not yet been notified to the Hungarian Competition Authority (GVH). The date for the conclusion of the procedure is still unknown.

In assessing the competition barriers, the GVH must take into account the advantages and disadvantages of the merger, the market structure, competition and the impact of the merger on consumers and the undertakings concerned, Portfolio writes. The further plans and strategies of Indotek and Auchan will become known after the competition law process has been completed.

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