Reliance In Talks To Acquire Metro's India Wholesale Operations: Report

Metro, which entered the Indian market in 2003, currently operates 31 wholesale distribution centers across the country, serving business customers only

A deal between RIL and Metro could value the business at $1 billion to $1.2 billion including debt, according to the report.

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As Mukesh Ambani’s Reliance Industries Ltd. (RIL) seeks to dominate India’s mammoth retail sector, the conglomerate is in advanced talks to acquire German firm Metro AG’s wholesale operations in India, citing sources privy to the development news agency Bloomberg reported on Thursday.  

According to the report, Charoen Pokphand Group Co. is no longer actively in talks with Metro, leaving only Ambani’s Reliance to pursue the so-called cash-and-carry business, the people said, asking not to be identified as the information is private. A final decision could emerge as early as next month, one of the sources told Bloomberg.

A deal could value the business at $1 billion to $1.2 billion including debt, a different person said. Discussions between Reliance and Metro regarding details including the valuation are ongoing and could fall apart, the people said.

Representatives for Metro and Reliance declined to comment, while a spokesperson for CP Group didn’t immediately respond to requests for comment.

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

Reliance is already the country’s biggest brick-and-mortar retailer, and a strong wholesale unit would further deepen its operations in India. Along with CP Group and Reliance, Metro’s potential cash-and-carry business sale had also drawn interest from Amazon.com Inc., Bloomberg News reported in July.

A few days ago, RIL announced one of its subsidiary will acquire 20 per cent stake for $12 million in US-based firm Caelux Corporation engaged in the development of perovskite-based solar technology. Reliance New Energy Limited (RNEL), the wholly-owned subsidiary of Reliance Industries, has signed definitive agreements to acquire the stake in Pasadena headquartered company in California.

With Reliance setting up a global-scale integrated photovoltaic Giga factory at Jamnagar, Gujarat, the collaboration will help it produce more powerful and lower-cost solar modules leveraging Caelux’s products.