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Dixons looks to Russian Eldorado for growth

'Imaginary land of wealth' apparently

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Dixons is considering expanding its electrical retailing empire to Russia and the Ukraine following the inking of a long-term co-operation deal with the Eldorado Group.

Dixons has until 2011 to acquire the Russian consumer electronics retailing group for £1bn. Under the agreement Dixons does not have to acquire Eldorado. Instead, it has the right to buy the group.

To secure the acquisition, Dixons would need to snap up an initial 10 per cent of Eldorado's equity by 2008. The price for 100 per cent of the equity of Eldorado Group is fixed at $1.9bn (£1bn).

Said Dixons chief exec John Clare: "Russia is a market with enormous potential and Eldorado Group is the ideal strategic partner. By entering into this agreement we will work closely with Eldorado Group management to develop a better understanding of the Russian market before committing the group financially."

With 610 stores, Eldorado Group is the biggest retailer in Russia with an estimated market share of around 22 per cent. Last year it notched up sales of $2.5bn (£1.3bn).

By midday shares in Dixons were up 1p (0.67 per cent) to 150p. ®

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