Reliance Industries Ltd will acquire German firm Metro AG's wholesale operations in India for ₹2,850 crore as the conglomerate run by billionaire Mukesh Ambani seeks to strengthen its dominant position in India's mammoth retail sector.
Reliance Retail Ventures Limited (‘RRVL’), a subsidiary of Reliance Industries Ltd, signed definitive agreements to acquire 100% equity stake in METRO Cash & Carry India Pvt Ltd. (‘METRO India’) for a total cash consideration of ₹2,850 crore, subject to closing adjustments.
Metro India started operations in India in 2003 as the first company to introduce cash-and-carry business format in the country and currently operates 31 large format stores across 21 cities with about 3,500 employees. The multi-channel B2B cash & carry wholesaler has reach to over 3 million B2B customers in India, of which 1 million are frequently buying customers, through its store network and eB2B app. METRO India has established itself as a trusted partner for kiranas and other small businesses and merchants. In the financial year 2021/22 (FY ended September 2022), METRO India generated sales of ₹7700 crore (€ 926 million), its best sales performance since its market entry into India.
“Through this acquisition, Reliance Retail gets access to a wide network of METRO India stores located in prime locations across key cities, a large base of registered kiranas and other institutional customers, strong supplier network and some of the global best practices implemented by METRO in India. 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 company said in a statement.
Isha Ambani, Director, Reliance Retail Ventures Limited, said, “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."
Metro AG CEO Steffen Greubel said:" 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."
Reliance is India's biggest brick-and-mortar retailer with over 16,600 stores, and a strong wholesale unit would further deepen its operations in India.
Metro is a leading international specialist in wholesale and food retail in 34 countries.