The Competition Commission of India on Tuesday said it has approved Reliance Retail Ventures’ (RRVL’s) acquisition of METRO Cash & Carry India for a cash consideration of Rs 2,850 crore.
RRVL is a subsidiary of Reliance Industries, while METRO Cash & Carry India is engaged in wholesale operations in India.
In December last year, RRVL had signed a definitive agreement to acquire a 100 per cent stake in the German firm Metro AG’s wholesale operations in India.
Through this acquisition, RRVL gets access to a wide network of METRO India stores across key cities, a large base of registered mom-and-pop stores (kiranas), other institutional customers, and supplier network, it said in its release while announcing its acquisition.
“The acquisition will further strengthen RRVL’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 symbiotic relationship will create greater value for all stakeholders in the retail ecosystem,” the release said.
METRO India began operations in India in 2003 and was the first company to introduce a cash-and-carry business format in the country. It currently operates 31 large format stores across 21 cities with about 3,500 employees.
The multi-channel business-to-business (B2B) cash-and-carry wholesaler reaches over 3 million B2B customers in India, of which 1 million are frequently buying customers, through its store network and eB2B application.
In 2021-22 (financial year ended September 2022), METRO India generated sales of Rs 7,700 crore (€926 million), which is its best sales performance since its market entry into India.
Isha Ambani, director, RRVL, said in its release, “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 multichannel platform, delivering strong customer experience.”
She added, “We believe that METRO India’s healthy assets, combined with our deep understanding of the Indian merchant/kirana ecosystem, will help offer a differentiated value proposition to small businesses in India.”
With the acquisition of METRO India, RRVL will continue to build reach across the country to serve households, kiranas and merchants, HoReCa (hotels, restaurants, and catering), and small and medium enterprises and institutions, and be the partner of choice, enable win-win opportunities for producers, brand companies, and global suppliers, the retailer said.
Steffen Greubel, chief executive officer, METRO AG, also said in the same release, “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.”
Greubel added, “This will benefit 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 the remaining country portfolio.”
Source: Business Standard, dated 14.03.2023
