INDIA – Reliance Industries Ltd, already the country’s biggest brick-and-mortar retailer and a strong wholesale unit, is seeking to further deepen its operations in India through the acquisition of German firm Metro AG’s wholesale operations in the country.

Reliance Industries, led by billionaire Mukesh Ambani, is reported to be in advanced discussions in the acquisition deal, where key stakeholders of Metro Cash & Carry India have expressed favor of Reliance as its future owner.

According to them, the India management feels that Reliance, due to its clout in the retail market and its understanding of the Indian policy framework, is best suited to run Metro’s India operations.

The race to acquire Metro Cash & Carry India began earlier in the year, attracting Bangkok (Thailand)-based conglomerate Charoen Pokphand Group Co. (CP Group), Reliance Industries LTD, and Amazon.com Inc., Bloomberg News reported in July.

The CP Group has however backed down its talks with Metro, leaving only Ambani’s Reliance to pursue the so-called cash-and-carry business.

Ambani’s Reliance has been keen on adding Metro’s wholesale operations, which include 31 large-format wholesale stores and multiple warehouses, to strengthen its supply chain network for its retail business.

The merger will also help Reliance in luring retailers and traders and developing a robust organized distribution network of groceries and daily essentials – an area that continues to be dominated by standalone distributors of consumer goods.

Sources aware of the developments told ET News that the deal could value the business at US$1 billion to US$1.2 billion including debt.

Even so, the sources note that the discussions between Reliance and Metro regarding details including the valuation are ongoing and could fall apart.

Reliance’s bid for Metro Cash & Carry India comes at a time when the behemoth is planning an aggressive expansion in the fast-moving consumer goods space, daily groceries, and doorstep deliveries (through JioMart).

Ambani has emphasized supply chain efficiencies will play a crucial role in Reliance’s growth in the next few years.

According to him, Reliance is working to strengthen its supply chain capabilities further so that it can serve across the vast Indian geography in the “most efficient manner.”

It will not only help it reduce waste but will also allow the company to pass on the benefits to its customers – which effectively means, Reliance Retail will be able to offer products at competitive prices.

Sligro Food Group Files As ‘Interested Party’ For Metro Business in Belgium

Elsewhere, Sligro Food Group has announced that it has formally applied as an interested party for the Metro business in Belgium.

On 14 September, the corporate court in Antwerp granted Makro Cash & Carry Belgium NV/SA’s request for creditor protection and judicial reorganization, and appointed legal representatives to oversee this process.

 

Sligro Food Group commented that it is not possible to make any concrete statements about the outcomes of the process to sell all or parts of Metro’s activities in Belgium to interested parties, which the court officers have commenced.

Makro Cash & Carry Belgium NV/SA includes both the Makro and Metro cash-and-carry operations in Belgium. The Metro Delivery Service NV/SA is not part of these proceedings, Sligro added.

In June of this year, wholesale group Metro AG announced the sale of its Belgian operations, Makro Cash & Carry Belgium N.V. to Bronze Properties S.à r.l, following a review process.

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