Reliance Retail has submitted a non-binding bid of Rs 5,600 crore to acquire Metro Cash and Carry’s India operations and assets, reported Economic Times.
According to the report, Thailand’s largest conglomerate, Charoen Pokphand (CP) Group, has placed a bid of about Rs 8,000 crore, or $1 billion, which almost matches the German wholesaler’s expectations.
Metro India gave detailed presentations on the performance and growth potential to senior teams from the two bidders in presence of merchant bankers in Bengaluru two weeks ago, three industry executives aware of the development told the newspaper.
“Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges,” a Reliance spokesperson told ET. He also said that as a policy, it will not comment on media speculation and rumours.
CP Group did not respond to an email sent by the newspaper.
One of the persons aware of the development told ET that Metro AG is concerned about the regulatory environment in India and the ‘swadeshi versus videshi’ debate.
Lobby groups representing Indian retail companies have upped the ante against overseas retailers, alleging violation of foreign direct investment (FDI) norms, which the foreign companies have always denied.
“Against this background, Reliance has an edge over others because it is the only Indian company serious about buying Metro India. Thailand’s CP Group is also hugely interested because it already has a presence in India through Lots Wholesale outlets,” ET reported, quoting one of the persons mentioned above.
JP Morgan and Goldman Sachs are the merchant bankers of Metro Cash and Carry India, which has valued the business at about $1 billion. Final binding bids are likely to be submitted within a month, during which, according to some industry experts, the bid amount could change.
Earlier this year, Metro reviewed its India business and decided to exit due to the need for higher investment to compete with deep-pocketed rivals such as Reliance and Amazon.
According to the report, Metro Cash and Carry India clocked sales of Rs 6,738.3 crore in FY21, a growth of 4 per cent over the previous year.
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