Ambani’s Reliance to acquire Metro’s India unit for $344 mln, expanding its footprint

Reliance Industries Ltd. agreed to buy Metro AG’s Indian unit for $344 million (28.5 billion rupees) as the nation’s biggest retailer run by billionaire Mukesh Ambani further expands his footprint.

Metro will see a transaction gain of about €150 million at closing, and higher earnings per share are anticipated, the company said in a statement late Wednesday.

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The transaction with Reliance Retail Ventures is expected to close by March 2023. Parent Reliance Industries’ stock rose as much as 0.9 percent during trading in Mumbai on Thursday, pushing this year’s gain to 9.4 percent.

With India’s trade industry seeing consolidation and disproportionate growth, a sizeable investment would have been needed to further grow the business, Steffen Greubel, Metro’s chief executive officer, said in the statement. “Now is the right time to use the momentum and open a new chapter for METRO India,” Greubel said.

The transaction brings to an end a months-long sale process that had once drawn interest from e-commerce giant Amazon.com Inc. and Thailand’s Charoen Pokphand Group Co. Adding Metro’s so-called cash-and-carry business will bolster Reliance, which is already India’s largest brick-and-mortar retailer. A bigger wholesale network will allow it to push deeper in India’s hinterland where bulk of its 1.4 billion people live.

Metro entered the Indian market in 2003 and currently operates 31 wholesale distribution centers across the country serving business customers, according to its website. Core clients include hotels, restaurants, as well as different types of corporates as small retailers.

The Ambani-led group’s B2B cash-and-carry business, Reliance Market, was set up in 2011 and has since then rapidly grown into a network of 52 stores with more than 4 million members, it said on its website.

Bloomberg News previously reported in October Reliance is said to be the sole bidder for Metro’s Indian unit and was in advanced discussions.

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