Metro kicks off China unit sale, likely to fetch $2 bln valuation - sources
By Kane Wu and Julie Zhu
HONG KONG, March 19 (Reuters) - German wholesaler Metro AG
has kicked off the sale of its China operations by
calling for bids, in a deal that would value the business at
between $1.5 billion and $2 billion, two people with direct
knowledge of the deal said.
Metro, which owns 95 stores in China and real estate assets
in major cities such as Beijing and Shanghai, is planning to
offload a majority stake in its China business, said the people.
The sale move is part of a global reorganisation of the
wholesaler and comes as China's wholesale and retail sectors are
experiencing disruption from e-commerce players.
Metro's China business could yet be valued at up to $3
billion, said two separate sources with direct knowledge of the
Potential bidders include electronics retailer Suning
Holdings Group, supermarket chain operators Wumart Stores Inc
and Yonghui Superstores, according to three of the
Private equity firms such as Hillhouse Capital Group and
Bain Capital are also studying a potential deal, they added.
Property makes up the bulk of the value in Metro's China
business, the people said, cautioning, however, that there is a
large gap between price expectations among buyers and the
A Metro spokeswoman in Germany said the company is in talks
with potential partners concerning the further development of
its China business but declined to comment on details of its
exchanges with potential partners or the sale process.
Bain and Suning declined to comment. Yonghui and Hillhouse
did not immediately respond to requests for comment. Calls to
Wumart went unanswered.
First-round, non-binding bids are due in the second week of
April, said two of the people. Citigroup and JPMorgan
are advising Metro, the people said. The banks declined
All the sources declined to be named as the deal talks are
E-commerce giant Alibaba Group Holdings has also
been in talks with Metro about taking a stake in the China
business, Reuters previously reported.
Tech giants such as Alibaba and Tencent have been
investing in supermarkets and shopping malls to help develop
their online-to-offline strategy.
Alibaba in 2015 poured $4.6 billion https://www.reuters.com/article/us-alibaba-suning-appliance/alibaba-to-invest-4-6-billion-in-china-electronics-retailer-suning-idUSKCN0QF0VP20150811
into Suning's listed entity - Suning.Com Co Ltd and
holds a 19.99 percent stake, its biggest step towards
integrating online and store-based shopping at the time.
Tencent, which has invested 4.2 billion yuan https://www.reuters.com/article/tencent-holdings-yh-superstores/chinas-tencent-invests-4-2-bln-yuan-for-stake-in-yonghui-superstores-idUSL4N1OF3VC
in a 5 percent stake of Yonghui, is also forming a partnership
in China with Europe' s largest retailer Carrefour.
The German wholesaler opened its first China store in
Shanghai in 1996 and now has over 11,000 employees in the
country. Its sales in the country reached 2.7 billion euros ($3
billion) in the financial year of 2017-2018, according to its
Once a sprawling retail conglomerate, Metro has been
restructuring in recent years to focus on its core
cash-and-carry business, selling Kaufhof department stores and
then splitting from consumer electronics group Ceconomy
Metro is also trying to offload its loss-making Real
(Reporting by Kane Wu, Julie Zhu and Sumeet Chatterjee in Hong
Kong; Additional reporting by Matthias Inverardi in DUESSELDORF;
Editing by Jennifer Hughes and Muralikumar Anantharaman)
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