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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Metro agrees to sell China business to Wumart
    2019-10-14  08:53    Shenzhen Daily

GERMAN wholesaler Metro has agreed to sell a majority stake in its Chinese operations to local retailer Wumart, continuing a drive to simplify its business and focus on its core customers in the hospitality industry.

Metro said Friday the deal gave the Chinese unit an enterprise value of 1.9 billion euros (US$2.1 billion) and that the German group would retain a 20 percent stake in a joint venture called Metro Wumart China.

Metro expects to receive proceeds of 1 billion euros from the stake sale, which chief executive Olaf Koch said could be used to fund acquisitions, without elaborating.

Once a sprawling retail conglomerate, Metro has in recent years been restructuring to focus on its European cash and carry business supplying hotels, restaurants and cafes.

It has sold off Kaufhof department stores, split from consumer electronics group Ceconomy and is in talks to sell its loss-making REAL hypermarkets.

Koch said Metro had an option to sell its 20 percent stake in the new Chinese joint venture in two years.

Metro’s Chinese operations include 97 stores and real estate assets in major cities such as Beijing and Shanghai.

The business made earnings before interest, tax, depreciation and amortization of 153 million euros in fiscal year 2017-18.

But wholesalers and retailers alike in China are facing intense competition from online operators.

Metro said its involvement in the joint venture would allow it to explore various strategic partnership opportunities with Wumart’s parent Wumei and its technology partner Dmall, “particularly in terms of international sourcing of goods.”

Metro said the deal is subject to regulatory approvals and is expected to close by the second quarter of next year.

(SD-Agencies)

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