Reliance gears up for fight against D-Mart and hypermarkets as its looks to close Metro deal this month
Reliance Industry’s mega acquisition of German retailer METRO AG’s Cash & Carry business in India, which is likely to be finalized in time for the group’s late founder Dhirubhai Ambani’s birthday later this month, will give the oil-to-telecom conglomerate the option to convert Metro’s 31 stores into multi-brand retail chains and take on the likes of D-Mart.
Adding B2C business to the wholesale stores will thus require tweaks to the operating model. Metro had earlier decided against ramping up its India operations by pumping in money after it was hit by the Covid-induced lockdowns and the impact on the Russian operations after sanctions were imposed.
Reliance is said to acquire Metro’ India unit in a deal estimated at around 500 million euros (Rs 4,060 crore), which includes 31 wholesale distribution centres, land banks and other assets owned by METRO Cash & Carry in the country.
This is going to aid Reliance Retail, the country’s largest retailer, expand its presence in the B2B segment.
According to sources, Reliance has completed the due diligence for Metro’s India business, which generates revenues of around $1 billion annually and is turning profits.
There are some concerns among the 4,000 employees of Metro over the change of ownership and the new work environment, but Reliance is likely keen to retain the people. A majority of the 31 stores are seen to be profitable.
