Prospective bidders revealed for Metro China sale

Date : 29 May 2019

Germany’s Metro has shortlisted eight companies for its China business, a deal valued at between US$1.5bn and US$2bn as previously reported.

Top retailers among the bidders

Reuters news agency, citing multiple sources who cannot be named due to the confidential nature of the sale process, reports the following are joining the bid:

  • Alibaba, in partnership with Taiwanese retailer RT-Mart
  • Walmart, US retail giant
  • Yonghui Superstores, part owned by Dairy Farm Group
  • Wumart supermarket chain
  • Suning Holdings, electronics retailer
  • Primavera Capital, private equity group
  • Boyu Capital and property developer China Vanke, a consortium
  • Meicai, fresh food delivery group

Of the above eight, RT-Mart, Walmart, Yonghui and Wumart are among the top 10 leading grocery retailers in China. Gaming and social media gian Tencent Holdings is considering joining the bidding race with Yonghui, of which it is a minority shareholder.

Meicai is an unexpected inclusion in the shortlist. Founded in 2014, the Beijing-based start up company connects farmers with buyers, both at home and in the restaurant business, disrupting traditional wholesaling by cutting out middlemen. It raised at least US$600m in 2018 and had the business valued at US$7bn.

Offline expansion in China fuels the interest

Interest in Metro comes as major tech companies, such as Alibaba, are aggressively expanding offline. It is driven by a maturing ecommerce market and capabilities of transforming China’s traditional and conventional retail sectors. Joining forces with Metro could bring synergy that is pursued by some of these ecommerce companies.

In addition, Metro’s supply chain is also attractive as it can source premium imported products that many of its rivals do not have access to.

The sale process is expected to be completed in September. Metro China currently has 95 stores and reported US$3bn last financial year.

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