RIL set to buy Metro Cash & Carry. All you want to know
Billionaire Mukesh Ambani’s Reliance Industries Ltd seems to be gobbling competitors up one after another.
Its latest cherry is German retailer METRO AG's Cash & Carry business in India in a deal estimated at around 500 million euros (Rs 4,060 crore), according to a report by the Press Trust of India.
What all does the deal include?
The deal includes 31 wholesale distribution centres, land banks and other assets owned by METRO Cash & Carry here, the report said.
But why does Reliance want to buy METRO’s India business?
This is going to help Reliance Retail, the country's largest retailer, expand its presence in the B2B segment.
Since when have the two parties been talking?
The PTI report said that talks between Reliance Industries and METRO was going on for the past few months and last week the German parent firm agreed to the offer from Reliance Retail.
What sort of clientele does METRO’s India business service?
METRO Cash & Carry's customers include retailers and kirana stores, hotels, restaurants and caterers (HoReCa), corporates, SMEs, companies and institutions.
But why is METRO exiting this business?
The B2B segment is considered to be a low-margin business and multinationals such as Carrefour have exited from the country in 2014.
Who were the others in the race to acquire METRO’s India business?
Other retailers were also in the race to acquire METRO Cash & Carry, including Siam Makro, which operates Lots Wholesale cash-and-carry trading business under the brand name LOTS Wholesale Solutions.
Last month, Siam Makro, part of the Charoen Pokphand Group of Thailand, announced its withdrawal from bidding for METRO Cash & Carry India.
When did METRO enter India and how big has its presence been in the country?
METRO AG, which operates in 34 countries, entered the Indian market in 2003.
It operates six stores in Bengaluru, four in Hyderabad, two each in Mumbai and Delhi, and one each in Kolkata, Jaipur, Jalandhar, Zirakpur, Amritsar, Ahmedabad, Surat, Indore, Lucknow, Meerut, Nasik, Ghaziabad, Tumakuru, Vijayawada, Visakhapatnam, Guntur and Hubballi.
Have there been any other similar deals in this segment in India?
In July 2020, e-commerce major Flipkart Group acquired 100 per cent stake in Walmart India Pvt Ltd, which operates the Best Price cash-and-carry business.
How is Reliance Retail structured?
Reliance Industries' subsidiary Reliance Retail Ventures Ltd (RRVL) is the holding company of all the retail companies under the group.
RRVL had reported a consolidated turnover of around Rs 2 lakh crore for the year ended March 31, 2022.
Start Investing in 5 mins*
Rs. 20 Flat Per Order | 0% Brokerage
Open Free Demat Account
By proceeding, you agree to the T&C.
Fill in your details below: