German retail giant Metro to list Russian business in London
21 Jan 2014
Germany's largest retailer Metro AG plans to sell up to 25 per cent of its shareholding in Russian cash and carry business through an initial public offering (IPO) on the London Stock Exchange later this year.
Metro's supervisory board chief Markus Haniel said in a statement, "A stock market listing is expected to give the Russian cash and carry business further opportunity to realise its growth potential.''
''Furthermore, the transaction will provide Metro group with additional strategic flexibility for investments and create further deleveraging potential," he added.
Dusseldorf-based Metro is the world's fifth-largest retailer which runs cash and carries, Europe's biggest consumer electronics chain, hypermarkets and department stores.
The company has over 2,200 business outlets in 32 countries in Europe, Africa and Asia and has around 265,000 employees. In 2012, it reported revenue of €66.7 billion.
"The initial public offering is planned for the first half of 2014, subject to market conditions, with the listing on the London Stock Exchange," the statement said.
Metro's Russian operations began in 2001 and have grown to become the group's most profitable unit and the third-biggest market for its cash and carry business, after Germany and France. The retailer's Russian sales were €4.1 billion in 2012.
The 25-per cent stake sale is expected to fetch at least €1 billion as analysts value the overall business at €4-7.5 billion.
The group's top brand Metro and Marko Cash and Carry has operations in almost every country where the company has presence with 752 stores and accounts for about half of the group's revenue.
Real is a hypermarket chain with 384 stores in five countries specialising in food products.
Media Markt is the German and European market leader in electronics retailing and has 718 locations in 14 countries while Saturn, which also deals with innovative consumer electronics, has 230 outlets in 8 countries.
Galeria Kaufhof is a large department store chain with 137 locations in Germany and Belgium.
In the Russian retail market, Metro occupies the fourth position after Russia's X5, Magnit and French group Auchan.
Metro's another Russian rival Lenta, controlled by US buyout firm TPG Capital also plans to sell about $1 billion of stock in London next month.
Detsky Mir, the country's largest children's goods retailer may also join the suite later this year, according to recent reports.
Russia, the world's largest country with a 143-million population, is poised to become Europe's largest retail market by 2018, as the consumer-growth story looks attractive to investors, according to retail industry researchers.
The share sale is expected to be run by Russia's Sberbank and US investment bank Goldman Sachs.
