Metro has completed the sale of its Indian division to Reliance Retail, India’s largest retail holding company. The German retailer has succeeded in divesting both of its problematic branches before the end of the year, along with the Belgian stores.
28.5 billion rupees
In February, Metro announced that it wanted to sell its Belgian and Indian operations. Both branches were a source of concern: while Belgium had been loss-making for years, competition in India was becoming too fierce. “Given the market dynamics, significant investments would be required to continue the growth of the company”, CEO Steffen Greubel said.
As the year draws to a close, the second divestment is also a fact. Reliance Retail Ventures, India’s largest retail group, officially announced that it was buying the German wholesaler’s Indian division for 28.5 billion rupees (about 320 million euros). This would mean that Metro would earn a profit of around 150 million euros from the sale.
A developing retail market
The retail market is still quite fragmented in India, but with this acquisition Reliance Retail hopes to strengthen its leadership position in the market. The company has several supermarket formats as well as non-food chains (clothing, electronics, furniture and others) and online shops. It now also possesses its own network of wholesalers.
Metro, for its part, wants to focus on accelerated growth in the remaining countries. The transaction is expected to be fully completed by March 2023. The German group had 31 Indian shops, mainly serving restaurants and small businesses, with a turnover of 926 million euros.