RRVL Acquires METRO India in a 2850 Cr Deal

Reliance’s Reliance Retail Ventures Limited (‘RRVL’) on Thursday signed definitive agreements to acquire 100 per cent equity stakes in METRO Cash & Carry India Pvt Ltd. (‘METRO India’) for a total amount of INR 2,850 crore, subjected to closing adjustments.

METRO India started as the first company to introduce cash-and-carry business format in the country in India in 2003. It currently operates 31 large format stores across 21 cities with about 3,500 employees. The company has reach to over 3 million B2B customers in India, out of which 1 million are frequent buying customers, through its store network and eB2B app. METRO India has established itself as a trusted partner for Kiranas and other small businesses and merchants. In the financial year 2021/22 (FY ended September 2022), METRO India generated sales of INR 7700 crore (USD 926 million), its best sales performance since its market entry into India.

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 customers, strong supplier network and some of the global best practices implemented by METRO in India. The acquisition will further strengthen Reliance Retail’s physical store footprint and ability to better serve consumers and small merchants by leveraging synergies and efficiencies across supply chain networks, technology platforms and sourcing capabilities. The symbiotic relationship will create greater value for all stake holders in the retail ecosystem.

Reliance’s has done a number of acquisitons this year. In Jan 2022, The Company made an investment in Dunzo to acquire around 25 per cent shares. It bought 55 per cent in Addverb Technologies in January 2022. In March, Reliance acquired 89 per cent of online lingerie retailer Clovia’s 89 percent stakes.

Energy wing of Reliance has done a big investment this year 2022. In March, it acquired Lithium Werks' assets. Additionaly, Compa-Cola in August and Shubhalakshmi Polyesters and SenseHawk in Sep 2022, are some of the major deals closed by the Reliance this year.

Speaking about this investment, Isha Ambani, Director, Reliance Retail Ventures Limited, 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 pioneer and key player in the Indian B2B market and has built a solid multi-channel platform delivering strong customer experience. We believe that METRO India’s healthy assets combined with our deep understanding of Indian merchant / kirana ecosystem will help offer a differentiated value proposition to small businesses in India.”

Dr. Steffen Greubel, CEO of METRO AG, said, “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. This in one hand will benefit both our customers and our employees, for whose loyalty and performance we are very grateful, and on the other hand will enable METRO to focus on accelerating growth in remaining country portfolio."

With the acquisition of METRO India, Reliance Retail claims to build reach across the country to serve the entire spectrum of Indian society i.e. households, kiranas and merchants, HoReCa and small and medium enterprises and institutions, and be the partner of choice, and enable win-win opportunities for producers, brand companies and global suppliers.

The transaction is subject to certain regulatory and other customary closing conditions and is expected to complete by March 2023.