Reliance Retail has signed a definitive agreement to acquire 100 per cent stake in METRO Cash & Carry India for a total cash consideration of Rs 2,850 crore, which is subject to closing adjustments.
Through this acquisition, Reliance Retail will get access to a wide network of METRO India stores located in locations across key cities, a large base of registered kiranas and other institutional customers, supplier network, Reliance Retail said in a release.
The transaction is subject to certain regulatory and other customary closing conditions and is expected to complete by March 2023.
“The acquisition will further strengthen Reliance Retail’s physical store footprint and ability to better serve consumers and small merchants by leveraging synergies and efficiencies across supply chain networks, technology platforms and sourcing capabilities. The symbiotic relationship will create greater value for all stakeholders in the retail ecosystem,” Reliance Retail said.
METRO India began operations in India in 2003 and was the first company to introduce a cash-and-carry business format in the country. It currently operates 31 large format stores across 21 cities with about 3,500 employees.
The multi-channel B2B cash & carry wholesaler reaches over 3 million B2B customers in India, of which 1 million are frequently buying customers, through its store network and eB2B app.
In the FY22 (financial year ended September 2022), METRO India generated sales of Rs 7,700 crore (€926 million), which is its best sales performance since its market entry into India, Reliance Retail said.
Isha Ambani, Director of Reliance Retail Ventures, said in the release, “The acquisition of METRO India aligns with our new commerce strategy of building a unique model of shared prosperity through active collaboration with small merchants and enterprises. METRO India is a pioneer and key player in the Indian B2B market and has built a solid multi-channel platform delivering strong customer experience.”
“We believe that METRO India’s healthy assets combined with our deep understanding of Indian merchant / kirana ecosystem will help offer a differentiated value proposition to small businesses in India,” she added.
With the acquisition of METRO India, Reliance Retail will continue to build reach across the country to serve the entire spectrum of Indian society which include households, kiranas and merchants, HoReCa (hotels, restaurants, and catering), and small and medium enterprises and institutions, and be the partner of choice, and enable win-win opportunities for producers, brand companies and global suppliers, the Indian based retailer said.
Dr Steffen Greubel, CEO of METRO AG, also said in the same release, “With METRO India, we are selling a growing and profitable wholesale business in a very dynamic market at the right time. We are convinced that in Reliance we have found a suitable partner who is willing and able to successfully lead METRO India into the future in this market environment.”
“This on one hand will benefit both our customers and our employees, for whose loyalty and performance we are very grateful, and on the other hand will enable METRO to focus on accelerating growth in remaining country portfolio,” Greubel added.