In a move to expand its foothold, India's largest retailer Mukesh Ambani owned Reliance acquires Metro for an amount of $344 million.
What is happening: Reliance has made a move to acquire Metro brand's Indian base.
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.
Why it matters: Metro will see a transaction gain of about $150 million at closing, and higher earnings per share are also being anticipated.
Adding Metro’s business will bolster Reliance, which is already India’s largest brick-and-mortar retailer.
A bigger wholesale network which Metro would provide will allow Reliance to enter deeper in India’s local areas where a good bulk of 1.4 billion people live.
The big picture: The two parties involved in the transaction are-
The Ambani-led group’s B2B cash-and-carry business, Reliance Market, set up in 2011. The chain now has 52 stores with more than 4 million members throughout.
Metro which entered the Indian market in 2003.
The chain currently operates over 31 wholesale distribution centres throughout its Indian base.
What is being said: Steffen Greubel, Metro’s chief executive officer, said in a statement. “Now is the right time to use the momentum and open a new chapter for METRO India,” in light of India's trade industry facing disproportionate growth which requires sizeable investments to grow businesses.
Numbers: Parent Reliance Industries’ stock rose as much as 0.9% during trading in Mumbai on Thursday, pushing this year’s gain to 9.4%.
What next: As per the statement by Reliance, the transaction would mostly close by March 2023.
Catch up quick: Mukesh Ambani expands reliance foothold in Indian business industry, acquires metro, translation to be completed by early 202