Reliance to acquire Metro Cash & Carry India in € 500 m deal
07 Nov 2022
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Reliance Industries is set to acquire German retailer Metro AG's Cash & Carry business in India in a deal estimated at around 500 million euros (Rs4,060 crore), industry sources said.
Metro, which operates 31 stores in 21 cities across India, has been active in the market since 2003. It operates six stores in Bengaluru, four in Hyderabad, two each in Mumbai and Delhi, and one each in Kolkata, Jaipur, Jalandhar, Zirakpur, Amritsar, Ahmedabad, Surat, Indore, Lucknow, Meerut, Nasik, Ghaziabad, Tumakuru, Vijayawada, Visakhapatnam, Guntur and Hubballi.
With around 3,350 employees and reported sales of around 765 million euros, the Indian business contributes just about 2.6 per cent of its annual revenue.
The deal also includes land banks and other assets owned by Metro Cash & Carry in India, reports citing sources said.
The acquisition will help Reliance Retail, the country's largest retailer, expand its presence in the B2B segment.
Metro has been exploring strategic options for its Indian unit and is in advanced discussions over a deal, a group spokesperson said.
Reliance Industries and Metro have been in discussions for the past few months and the German parent firm agreed to Reliance Retail’s offer only last week, say reports.
Metro Cash & Carry supplies to retailers and kirana stores, hotels, restaurants and caterers, corporates, SMEs, companies and institutions.
Metro AG, which operates in 34 countries, entered the Indian market in 2003.
The B2B segment in India is highly competitive with local wholesalers having a firm grip on the retail segment and is considered to be a low-margin business. Multinationals such as Carrefour have exited the country in 2014, finding the market not lucrative.
In July 2020, e-commerce major Flipkart Group acquired 100 per cent stake in Walmart India Pvt Ltd, which operates the Best Price cash-and-carry business.
Other retailers in the race to acquire Metro Cash & Carry included Thailand’s Siam Makro, which operates Lots Wholesale cash-and-carry trading business under the brand name LOTS Wholesale Solutions.
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