Owner of Reliance Industries Ltd Mukesh Ambani will acquire German firm Metro AG’s wholesale operations in India for ₹ 2,850 crore.
Reliance Industries Ltd will spend $2,850 crore for German firm Metro AG’s wholesale operations in India, as the conglomerate led by billionaire Mukesh Ambani seeks to strengthen its dominance in India’s massive retail sector.
The retail division of Reliance Industries (RIL), finalized official contracts on Thursday to buy Metro Cash and Carry India Pvt Ltd, which operates under the “Metro India” brand, for a cash consideration of Rs 2,850 crore. Reliance Retail, owned by Mukesh Ambani, said in a statement: “Through this acquisition, Reliance Retail gets access to a wide network of METRO India stores located in prime locations across key cities, a large base of registered kiranas and other institutional customers, strong supplier network, and some of the global best practises implemented by METRO in India.
The company said in statement, the acquisition will further expand Reliance Retail’s physical store base and capacity to better serve customers and small businesses. Utilizing synergies and efficiencies across supply chain networks, technological platforms, and sourcing capabilities, The transaction is scheduled to close by March 2023, subject to a few regulatory requirements and other usual closing conditions.
Currently, Metro India provides service to kiranas as well as other microbusinesses and retailers. The company’s revenues for the fiscal year 2021–2022 totaled Rs 7,700 crore, marking its greatest sales performance since entering the Indian market.
In 2003, when the company first started functioning in India, it was the country’s first to use the cash-and-carry business model. It presently has 31 big format stores spread throughout 21 locations and more than 3,500 employees. In India, the multi-channel B2B cash-and-carry wholesaler has a reach of over 3 million B2B clients, 1 million of whom are regular consumers through its retail network and eB2B app, according to a Reliance regulatory filing.
RRVL Director Isha Ambani commented on the development, said “The acquisition of Metro India aligns with our new commerce strategy of building a unique model of shared prosperity through active collaboration with small merchants and enterprises.” Metro India is a key player in the Indian B2B market and has built a solid multi-channel platform delivering a strong customer experience.
“We believe that Metro India’s healthy assets combined with our deep understanding of the Indian merchant / kirana ecosystem will help offer a differentiated value proposition to small businesses in India,” she added.
A few days before to the acquisition, Reliance Consumer Products, the FMCG division and fully owned subsidiary of Reliance Retail Ventures launched its CPG brand, Independence, in Gujarat. Reliance Industries’ 45th annual general meeting in August, Isha Ambani made the announcement that the business would enter the FMCG market this year. Staples, processed foods, and other everyday necessities will all be available at Independence in a wide range of product categories. As it gets ready for a nationwide launch for the brand, it intends to build Gujarat as a “go-to-market” state to achieve excellence in execution for its FMCG business, the firm said. Mukesh Ambani
“With Metro India, we are selling a growing and profitable wholesale business in a very dynamic market at the right time. We are convinced that in Reliance we have found a suitable partner who is willing and able to successfully lead Metro India into the future in this market environment.” Reliance is India’s biggest brick-and-mortar retailer with over 16,600 stores, and a strong wholesale unit would further deepen its operations in India, Metro AG CEO Steffen Greubel said.
Metro is a leading international wholesale and food retail specialist with operations in 34 countries. According to the company’s website, Metro Cash & Carry, its wholesale division commenced establishing business in India in 2003 and now runs 31 wholesale distribution centres that cater primarily to business customers.
Reliance Retail, the retail division of the oil-to-telecom company, with 18 billion dollars in annual revenue and rated 56th among the world’s biggest retailers. It is the world’s second-fastest-growing retail company behind only South Korea’s Coupang. Reliance already holds a 20% market share in the organised food and grocery sector and has roughly three times as many stores as its closest rival,
It this month forayed into FMCG with the launch of the brand ‘Independence’ for staples, processed foods, beverages and other daily essentials, rivalling the likes of ITC, Tata Consumer Products Ltd, Patanjali and Adani Wilmar.
While Walmart India Pvt Ltd, which runs the Best Price cash-and-carry business, has acquired a 100% interest from e-commerce giant Flipkart Group.
Retailers, including Siam Makro which operates Lots Wholesale cash and carry trading business, under the brand name LOTS Wholesale Solutions was also in the race to acquire Metro Cash & Carry business.
Metro has six wholesale distribution centres in Bangalore, four in Hyderabad, two in Mumbai and Delhi, and one in Jaipur, Jalandhar, Zirakpur, Amritsar, Ahmedabad, Surat, Indore, Lucknow, Meerut, Nasik, Ghaziabad, Tumakuru, Vijayawada, Visakhapatnam, Guntur, and Hubballi. Source NDTV
Reliance Retail is the retail initiative of Reliance Industries Limited and central to the group’s consumer-facing businesses. Reliance Retail has been at the forefront of bringing about the Organized Retail revolution in India.
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