Magnit

M&A Activity • Jun 6, 2018

MAGNIT PJSC (MGNT)

06-Jun-2018 / 12:00 MSK Dissemination of a RegulatoryAnnouncement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

Press Release Krasnodar June 6, 2018

Magnit PJSCannounces entering into negotiations regarding the acquisition of SIAGroup

Krasnodar, Russia (June 6, 2018) - PJSC Magnit (Magnit), one of Russia's leading retailers, announces that it is entering into negotiations with the group of companies Marathon Group (Marathon Group), regarding the acquisition of the pharmaceutical distribution company SIA Group (Jointstock company "SIA INTERNATIONAL LTD" Taxpayer Identification Number 7714030099, Primary State Registration Number 1027739185407 located at Building 12B, 35 Svobody Street, Moscow, 125362, Russia)and isconcurrently initiating its due diligence process. The finalstructure and method of the transaction and settlement will be discussed byMagnit and the Marathon Group in the course of their negotiations and willtakeinto account theresults of Magnit's due diligence on the SIAGroup.

Magnitconfirms that it plans to expand into theretail pharmacymarket. The Pharmacy pilot project has demonstrated good results. Magnit believes that pharmacies can potentially be integrated into manyMagnit cosmetics stores, convenience stores and hypermarkets, which according to the Magnit's estimates, willenable it to build a large pharmacy chain within a short period of time and with insignificant capital expenditures. Magnit believes that its high brand recognition and its long-termcustomer loyalty and trust is a significant competitiveadvantage that will createa synergistic marketing effect and will, ultimately, help to reduce the maturity time of the pharmacy stores and improve the payback period of the pharmacy project.

Magnit CEO Khachatur Pombukhchan said:

"Wethink that the Russian pharmacy retailmarket is one of the most attractive for expansion. This segment is big enough - atmore than one trillion Rubles, which comprises 10% of the food retail market and has demonstrated solid growth over the last fewyears. Nonetheless, the pharmacy segment has not yet been consolidated and thus, a strong player, like Magnit, should be capable of capturing significant market share compared to other large competitors. Besides, pharmacies and food stores are mutual drivers of customer traffic which should provide a multiplier economic effect. Magnit needs to build an in-houselogistics platformin order to roll-outand integrate pharmacies into existing and newMagnitstores. OnMay 17, 2018 the Board of Directors approved the updated strategy for pharmacy retail development, including as one of the options the development ofa logistics platformby means ofacquisition of the existing distribution business. It willenable Magnit to grow the scale and scope in as short a time as possible and to enter the pharmacy retailmarket with a significant competitive advantage. SIAGroup best meets Magnit's requirements with respect to regionalcoverage, assortment rangeand logisticscapacity. In order to estimatethe potential benefits, Magnit willconduct the due diligence phase with the help ofinternationalconsultants".

"SIA Group (www.siamed.ru) is one of the Russia's TOP 5 pharmaceutical distributors and is part of Marathon Pharma group (pharmaceutical subholding ofMarathon Group). According to SIAGroup it has well-developed logistics infrastructure: its total warehousing space in Moscow and 35 othercities ofRussiaamounts to 224,000 m² , total number ofemployees is 2,700.

Marathon Group (www.marathongroup.ru) is the group of companies founded in 2017 by Alexander Vinokurov, Sergey Zakharov, later Andrey Tyasto joined the team as a partner. The company's core business is to make investments in retail, pharmaceutical, infrastructure and agricultural assetsand further develop them.

For further information, pleasecontact:

Timothy Post Head ofInvestor Relations Email: post@magnit.ru Office:+7-861-277-4554 x 17600 Dina Svishcheva DeputyDirector, Investor Relations Email:Chistyak@magnit.ru Office:+7-861-277-4554 x 15101 MediaInquiries Media Relations Department press@magnit.ru

Company description:

Public Joint Stock Company "Magnit"is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city ofKrasnodar.As ofMarch 31, 2018, Magnit operated 37 distribution centersand 16,625 stores (12,283 convenience, 242 hypermarkets, 210

Magnit Family storesand 3,890 drogeriestores) in 2,764 citiesand towns throughout 7 federalregions ofthe Russian Federation.

In accordance with theaudited IFRS results for 2017, Magnit had revenues ofRUB 1,143 billion and an EBITDAofRUB 92 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating fromStandard &Poor's ofBB. Measured bymarketcapitalization, Magnit is one ofthelargest retailers inEurope.

Forward-looking statements:

This documentcontains forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any changein circumstances.

ISIN: US55953Q2021 Category Code: MSCU TIDM: MGNT LEICode: 2534009KKPTVL99W2Y12 OAM Categories:2.2. Inside information Sequence No.: 5619 EQS News ID: 692851

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