Subject to closing adjustments, Reliance Retail has inked a legally binding agreement to buy a 100% share in Metro Cash & Carry India for a total cash consideration of Rs. 2,850 crores.
Reliance Retail claimed in a statement that it would have access to a huge base of registered kiranas and other institutional clients, a supplier network, and a vast network of Metro India outlets situated in important cities through this transaction.
The acquisition is scheduled to close by March 2023, subject to a few regulatory requirements and other usual closing conditions.
“By using synergies and efficiencies across supply chain networks, technological platforms, and sourcing capabilities, the purchase will further expand Reliance Retail’s physical store base and capacity to better serve customers and small businesses. The mutually beneficial collaboration will increase value for all parties involved in the retail ecosystem, “said Reliance Retail.
The first enterprise to introduce a cash-and-carry business model to India was Metro India, which started operating there in 2003. With roughly 3,500 workers, it presently has 31 big-format stores in 21 locations.
Through its shop network and eB2B app, the multi-channel B2B cash & carry wholesaler has access to over 3 million B2B clients in India, of which 1 million are frequent buyers.
According to Reliance Retail, Metro India’s FY22 sales of Rs 7,700 crore (€926 million) were the company’s highest sales performance since entering the Indian market.
Isha Ambani, Director of Reliance Retail Ventures, stated in the statement: “The purchase of Metro India fits with our new business strategy, which is to create a special model of shared prosperity by actively collaborating with small businesses and retailers. In the Indian B2B sector, Metro India was a pioneer and a major participant. It has developed a powerful multi-channel platform that offers a superior customer experience.”
We think that Metro India’s strong financial position and our comprehensive knowledge of the Indian merchant and kirana ecosystem would enable us to provide small companies in India with a unique value proposition.
With the purchase of Metro India, Reliance Retail will broaden its reach throughout the nation to serve all segments of Indian society, including households, kiranas and merchants, HoReCa (hotels, restaurants, and catering), small and medium-sized businesses, and institutions. The Indian-based retailer also plans to become the partner of choice and create win-win scenarios for manufacturers, brand companies, and international suppliers.
In the same press statement, Metro AG CEO Dr. Steffen Greubel added, “With Metro India, we are offering a lucrative and expanding wholesale operation in a rapidly changing market. We are confident that in Reliance, we have found a reliable business partner that is prepared to steer Metro India into the future in this competitive market.”
“This will help both our customers and our staff, whose commitment and performance we are very appreciative of, on the one hand, and on the other hand, it will allow Metro to focus on driving growth in the remaining country portfolio,” Greubel continued.