Finland’s Kesko has admitted it is in talks to buy a large-scale grocery business in Russia.
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Kesko officials refused to name the Russian business this morning (12 September) despite chief executive Matti Halmesmaki telling a seminar in Helsinki that plans had advanced quickly since Kesko announced it was considering the Russian move two months ago.
“We are in talks about a big food operation in Russia,” Halmesmaki told participants in the seminar. He gave few details but said the purchase would be low-risk, pointing to high acquisition costs in Russia.
Kesko’s hardware store chain Rautakesko already has outlets in the St. Petersburg region but the company aims to have 12 around the country. Rautakesko is also looking at acquisitions in Russia, the Baltic countries, Poland, Romania and Belarus, he said.
The move comes with Kesko flush with cash from the sale of its stake in a Baltic joint venture. The company achieved a capital gain of more than EUR150m (US$208m) a year ago from the sale of its 50% stake in Rimi Baltic, a venture with the Swedish ICA Group.
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By GlobalDataKesko said at the time the proceeds would be used for expansion into Russia.
