The Polish eCommerce firm Allegro hopes to create a regional platform through its $1.02 billion purchase of the Czech online retailer Mall Group.
As Reuters reported on Friday (Nov. 5), the deal will see Allegro acquire Mall Group’s eCommerce assets — along with the logistics assets of WE|DO from Jakub Havrlant’s Rockaway Capital investment group, PPF Group and Daniel Kretinsky and Patrik Tkac’s EC Investments.
The company says it will finance the deal, which is expected to close in the second half of 2022, through a stock-and-cash consideration. The final price may increase by as much as $57 million based on certain short-term objectives.
Allegro’s shares rose by 11% on Thursday (Nov. 4) due to the announcement, following a 40% drop earlier this month amid increasing competition with Amazon in Central Europe after the retail giant launched Prime in Poland.
“Buyers will benefit from the improved selection, price and convenience, while a joint base of around 135,000 merchants will be able to ‘list once, sell everywhere’,” Allegro Chief Executive Francois Nuyts said in a statement.
Allegro says the merger will allow it to double its retail market to $285 billion and 70 million customers, operating in Poland, the Czech Republic, Slovakia, Hungary, Slovenia and Croatia.
“[The deal] doubles the headroom for growth, and that means all the innovations we’re doing can scale much better and reach [many] more consumers,” Nuyts said.
Allegro will also get access to WE|DO’s 1,100 pick-up points and lockers, which will help it reach its goal of having around 3,000 parcel lockers by the close of next year.
Allegro became the largest-ever IPO in Poland’s history last October, raising about $2.3 billion at a valuation of $17.6 billion when it listed on the Warsaw Stock Exchange (WSE).
Founded more than 20 years ago and offering services akin to eBay, Allegro now holds 33% of Poland’s eCommerce market, employs more than 3,750 people and attracts more than 20 million monthly visitors to its website.