Lidl owner has its eye on Metro subsidiary Real

The German Schwarz group, parent company of Lidl and Kaufland, has shown an interest in about 100 Real stores, currently belonging to the Metro Group. There are at least five other interested parties, including fellow food retailer Edeka.

Half a dozen interested parties

Metro has found at least six acquisition candidates for its hypermarket chain, which has been for sale since September. One of the interested parties is the Schwarz group, which is looking to take over about a hundred stores and turn them into Kaufland outlets, as CEO Klaus Gehrig revealed in local newspaper Handelsblatt. Other candidates include supermarket groups Edeka and Globus, as well as investors Morgan Stanley and Cerberus.

Metro’s CEO Olaf Koch wants to finish the acquisition by April, preferring to sell the chain as a whole. Considering the hypermarkets’ weak position and the difficult market circumstances in distribution, Metro was worried there would be no interested parties at all. That turned out to be a groundless fear, although keeping the chain as a whole will prove very difficult.

Real currently has 282 hypermarkets and 34,000 employees, which generated a turnover of 7.2 billion euros and 154 million euros of profit in the past financial year. If Kaufland manages to integrate a hundred stores into its formula, that chain would be able to generate 2 to 3 billion euros of additional turnover.