Mego is set to acquite all Iki chain stores in Latvia (photo: delfi.lv)
Major retail trade company Mego has has signed a deal to take over supermarket chain, Iki in Latvia.
A total of 51 Iki stores will become retail outlets of Mego after the latter company announced they would buy over Palink, the company that runs the Iki chain stores in Latvia.
Irena Hupenija, Mego Board member welcomed the news. She said: "Being a local company with experience spanning fifteen years, this is a historic and very important event to us. The decision to acquire Palink shares was taken because we were willing to expand so as to become more competitive on Latvian market, and offer our customers better-quality service," said Hupenija.
The final decision over the deal rests with the Latvian Competition Council is to make the final decision on the deal, reports nozare.lv.
The Competition Council's spokeswoman Inita Kabanova said that the council had received the acquisition report on Jan. 10 and the documents were officially accepted today.
Palink Executive Director Emil Stefanov commented that the decision to sell the company's business in Latvia was taken in order to optimize operations of the "Palink" group and concentrate on those markets where operations were more efficient.
Due to a small market share, competing with other retailers in Latvia was problematic to "Palink". An insolvency case against Palink in 2012 forced the company to cut investments in Latvia, explained Stefanov.
The Latvian branch of Palink, which employed 900 people last year, representing the "Iki" chain stores, is one of the largest food retailers in Latvia.
Meanwhile, Mego is one of the largest retail trade companies in Latvia, in business since 1999. The chain currently runs a total of 36 stores and employs more than 600 people.
Other company details show:Palink posted 17.73 million euros in losses in 2012, 43 percent more than in 2011, according to "Firmas.lv" data. The company's turnover amounted to 95.22 million euros in 2012 - 9 percent down on 2011.Mego posted 480,077 euros in losses in 2012, compared to a loss 428,634 euros in 2011. The company's turnover decreased to 50.42 million euros last year, 9.8 percent less than in 2011.Mego share capital is 2.99 million euros. The company belongs to Mihails Ulmans (62 percent), Viktors Karbanovs (18 percent), Aleksandrs Morozs (10 percent) and Grigorijs Vovks (10 percent).