Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Ltd, on December 22 signed definitive agreements to acquire 100 percent equity stake in Metro Cash and Carry India Pvt Ltd (Metro India) for a cash consideration of Rs 2,850 crore.
Metro India, a wholly owned subsidiary of Mero AG, started operations in India in 2003 as the first company to introduce cash-and-carry business format in the country and now runs 31 large format stores across 21 cities with about 3,500 employees.
Also Read: RIL gains as investors cheer synergy benefits from Metro India acquisition
The multi-channel B2B cash-and-carry wholesaler has a reach to over 3 million B2B customers in India and 1 million of them are frequent buyers through its store network and eB2B app.
Metro India serves kiranas and other small businesses and merchants. In the financial year 2021-22 (FY ended September 2022), the company generated sales of Rs 7,700 crore, its best sales performance since its market entry into India.
ALSO READ: Why buying Metro India makes sense for Reliance Retail
Through this acquisition, Reliance Retail gets access to a wide network of outlets and retail and institutional buyers, and a strong supply channel. It will also help Reliance Retail’s physical store footprint and the ability to better serve consumers and small merchants by leveraging synergies and efficiencies across supply chain networks, technology platforms and sourcing capabilities.
“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," Isha Ambani, Director, Reliance Retail Ventures Limited, said.
"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.”
Share price of Reliance Industries opened higher on December 22 after the company announced the acquisition. RIL started trading at Rs 2598 on the NSE, higher than the previous close of Rs 2584. The stock, with an 11 percent weightage in the Nifty 50, has gained over 7 percent in 2022 so far.
Reliance Retail will continue to widen its reach across the country to serve the entire spectrum of Indian society - from households and kiranas to merchants, and from hotels, restaurants and catering to small and medium enterprises and institutions - with the help of this acquisition.
“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," Dr Steffen Greubel, CEO of Metro AG, said.
"This, in one hand, will benefit both our customers and our employees, for whose loyalty and performance we are very grateful, and on the other hand will enable Metro to focus on accelerating growth in remaining country portfolio."
The transaction is subject to certain regulatory and other customary closing conditions and is expected to complete by March 2023.
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