Notice of intention

October 1, 2018

Moscow, Russia – October 1, 2018 – Cherkizovo Group (MOEX: GCHE), the largest vertically integrated meat producer in Russia, intends to acquire 75% of Samson – Food Products, a group of companies based in St Petersburg and offering meat products under such brands as Samson, Fileya and other. The value of the deal is not disclosed.

After the Federal Antimonopoly Service of Russia approves the deal, Samson – Food Products (SFP) will still operate independently with no changes to its management. The parties describe the move as a strategic partnership.

This deal is set to strengthen Cherkizovo’s positions in St Petersburg and the North-Western Federal District (NWFD). The Group tapped into the latter in 2017 and has already entrenched itself in the region. The Company estimates that its Petelinka brand currently accounts for 29% of branded poultry sales in the largest retail chains across the NWFD. The Pava-Pava brand has captured 53% of the turkey market, while Cherkizovo’s branded pork sales account for 8% of the branded segment.

In turn, Samson Group will get access to the raw materials and professional expertise of Russia’s largest meat producer. This partnership will also enable it to penetrate new markets outside St Petersburg and the NWFD, which currently make up 90% of SFP’s sales.

“The deal is well-aligned with Cherkizovo’s development strategy. The Samson brand is associated with natural, fresh products and a focus on healthy foods, which is fully in line with our values. In addition, our partnership will serve to expand the Group’s branded portfolio of higher value-added products,” noted Sergey Mikhailov, Cherkizovo Group's CEO. As was reported earlier, the Group plans to increase the share of these products from 60 to 80% of its revenue by 2020.