Dedicated locality research platform
Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
German food wholesaler, Metro AG, has successfully concluded the divestment of its entire India-based business, including its 31 wholesale outlets and six real estate holdings, to Reliance Retail Ventures Ltd (RRVL). The equity valuation for the transaction was pegged at approximately ?0.3 billion (?2,700 crore).
The transaction, according to Metro AG, has resulted in an Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) gain of around ?150 million (approximately ?1,345 crore), with cash proceeds totalling ?0.3 billion. Steffen Greubel, CEO of Metro AG, expressed confidence in Reliance Retail's capability to steer the future trajectory of the Indian operations, leveraging their local market expertise.
Metro AG stated that this strategic divestment aligns with its longer-term growth objectives and will substantially contribute towards reducing its net debt. This reduction will be in addition to the debt cut realized in the first quarter of the current fiscal year when the Indian operations were reclassified.
While the ownership of the Indian operations has transferred to Reliance Retail, all the existing outlets will continue to function under the Metro brand for a mutually agreed transition period. Both Metro AG and Reliance Retail have assured that there will be no immediate changes for the employees and customers of these outlets.
In conclusion, this move marks a significant strategic shift for both companies. Reliance Retail, with this acquisition, strengthens its retail footprint in India, leveraging Metro AG's established network. On the other hand, Metro AG, by divesting its Indian operations, frees up resources to focus on its mid and long-term growth strategies, thus maintaining its momentum in other markets.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
