Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Germany's Metro to expect at least eight second-round bids for China unit: sources

Published 27/05/2019, 12:17
Updated 27/05/2019, 12:35
© Reuters. German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf

© Reuters. German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf

By Kane Wu and Julie Zhu

HONG KONG (Reuters) - At least eight suitors are preparing second-round bids to buy a majority stake in German wholesaler Metro AG's Chinese operations, Reuters learned from people directly involved in the matter, as suitors vie for heft in a changing offline landscape.

A deal could see Metro's China business valued at $1.5 billion to $2 billion, Reuters previously reported.

Interest in Metro comes as a maturing e-commerce market and big-data capabilities transform China's traditional wholesale and retail sectors, with technology majors such as Alibaba (NYSE:BABA) Group Holding Ltd aggressively expanding offline.

Teaming up with such a wholesaler could also bring synergy to the business-focused strategies that some e-commerce firms are pursuing, said some of the people. Moreover, Metro's supply chain overseas is attractive as it offers premium imported products that its rivals do not have access to, they said.

Metro has asked a shortlist of bidders to submit non-binding offers by June 10, said two of the people, who all declined to be identified as the information is confidential. The whole process is likely to conclude in September, the two added.

Bidders include the consortia of private equity firm Boyu Capital with property developer China Vanke Co Ltd, Hopu Investments with fresh food delivery firm Meicai, and Hillhouse Capital Group with supermarket chain operator Yonghui Superstores Co Ltd, the people said.

Two people said gaming and social media giant Tencent Holdings Ltd is considering joining the race with Yonghui, of which it is a minority shareholder.

Alibaba is also working on a bid with Taiwan's RT-Mart International Ltd, a portfolio firm, one of the people said. U.S. retailer Walmart (NYSE:WMT) Inc, which runs 400 hypermarkets in China, is also on the list, three of the people said.

Other bidders include Chinese electronics retailer Suning Holdings Group, supermarket operator Wumart Stores Inc and private equity firm Primavera Capital Group, the people said.

Boyu Capital, Vanke and Alibaba declined to comment. Walmart could not provide comment outside regular U.S. business hours. Reuters could not reach Meicai or Wumart for comment. The other bidders did not respond to emailed requests for comment.

Metro told Reuters it aimed for a strategic partnership to maximise the growth potential of its Chinese business. It said it is speaking with potential partners and will narrow its list of suitors for further talks. It declined to provide further details such as time frame or the identity of suitors.

The German wholesaler opened its first China store in Shanghai in 1996. It now employs 11,000 people across the country, and had sales of 2.7 billion euros ($3.02 billion) in the financial year ended September 2018, its website showed.

Property makes up the bulk of the value of Metro's China business, people with direct knowledge of the matter previously told Reuters.

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 AG.

© Reuters. German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf

($1 = 0.8933 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.