- 07 Nov 2022
- ICICIdirect Research
RELIANCE RETAIL MAY ACQUIRE WHOLESALE OPERATIONS OF METRO AG
News:
As per media reports , Reliance Industries is in advanced discussions to acquire German firm Metro AG’s wholesale operations in India. Metro entered the Indian market in 2003 and currently operates 31 wholesale distribution centres across the country, serving business customers only. Charoen Pokphand Group Co who had earlier shown interest in acquiring Metro AG is no longer pursuing the same leaving only Reliance Retail who is interested in acquiring the German firm’s cash-and-carry business. As per certain industry participants a deal could value the business at $ 500 million (Rs 4060 crore). The company had reported revenue worth Rs 6500 crore with EBITDA of Rs 118 crore as on FY21
View:
Reliance Retail has been aggressively expanding its presence in the general trade segment by supplying groceries and fast moving consumer goods. If Reliance Retail is able to acquire Indian cash and carry wholesale operations of Metro AG, it will help boost the retail expansion plans that already is spread across modern retail, stocking up local kiranas and e-commerce grocery deliveries. Metro Cash & Carry India, which primarily serves the licensed retailers and traders in the country with groceries and other daily consumable items would help Reliance further consolidate its backend supply chain
Impact:
Positive