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Metro to spin off Real
Posted on Friday, 14 September 2018 14:16
Metro has announced it is selling its German-based supermarket company Real in order to focus entirely on its wholesale business.

A move comes after several failed attempts to sell the company, which posted a loss last year and a drop in sales by 3.1 per cent to EUR 7.20 billion.

Patrick Muller-Sarmiento, chief executive of Real, said: “In recent years, we have taken the entrepreneurial initiative and completely restructured our business for our customers.

“The basis for an independent future has been built. We are convinced of the potential of our company and its development opportunities.”

Reuters notes that as a result of the sale, the supermarket company could attract industry giant Amazon, which has expressed an interest in pursuing deals in the German food retailer sector.

According to Zephyr, the M&A database published by Bureau van Dijk, there have been 388 deals targeting supermarkets and other grocery (except convenience) stores providers announced since the beginning of 2018.

In the largest of these, J Sainsbury agreed to by Asda Group for GBP 7.30 billion.

The sale could prove to be a reversal in fortune for Real, which in the past has been passed over by foreign investors due to the rise in discount supermarkets such as Aldi and Lidl, Reuters observed.

Amazon did not comment on the potential interest in the company, which Berstein analyst Bruno Monteyne told Reuters could fetch EUR 1.00 billion.

Monteyne added that Germany could be an important country for the industry giant due to its untapped potential.

Headquartered in Mönchengladbach, Real has 282 supermarkets throughout Germany and employs a staff of 34,000 people.

Also, according to its website, it now has one of the largest digital marketplace offerings in the country, comprising 12.00 million online products, which the company predicts will generate EUR 380.00 million in sales this year.

© Zephus Ltd