Reliance, CP group, PE firms in race for Metro Cash & Carry India

After weeks of deliberations and negotiations, investors and leading retail players are preparing to bid for the German wholesale major Metro Cash & Carry’s India operations. From the country’s leading retailer Reliance to Thailand-based conglomerate Charoen Pokphand (CP group) and private equity player Lightspeed Venture Partners, Metro’s India business has caught the attention of many leading business groups across the world, sources privy to the developments have told Business Today.

Reliance Retail, that operates over 13,000 physical retail outlets - including hundreds of large format modern retail stores - across the country, is strategically well placed to acquire a major stake in Metro’s India unit. The move will help boost its retail expansion plans that already spreads across modern retail, stocking up local kiranas and e-commerce grocery deliveries. Metro Cash & Carry India, which primarily serves the licensed retailers and traders in the country with groceries and other daily consumable items, apart from certain categories of durable items, would help Reliance further consolidate its backend supply chain. The group, in fact, is aggressively expanding into the general trade segment, where it is supplying the local groceries with fast moving consumer goods (FMCG) products.

Bangkok-headquartered CP group, that owns a controlling stake in Charoen Pokphand Foods, is one of the world’s largest producer of shire, pork, poultry and many agri-based items and operates a leading cash & carry business through Siam Marko. The group also operates one of the world’s largest round-the-clock convenience store chain 7-Eleven. According to sources, CP Group’s interest in Metro’s India business will help it expand its cash & carry business in the country, apart from supporting its 7-Eleven brand.

While, PE firm Lightspeed Ventures has been approached by Metro AG and is evaluating its offer, in association with a bunch of other companies, to buy a stake, sources BT spoke to has said.

BT has mailed Metro Cash & Carry India for an official statement. The story will be updated as and when the company responds.

Meanwhile, a spokesperson from the parent firm Metro AG has told BT in a statement, “We do not comment on rumours and speculations."

Germany-based Metro Group, that owns Metro Cash & Carry India, has been in search of a partner to divest a part of its stake in the local unit or fully exit the local market, say sources. In response to a query, a Metro AG spokesperson had told Business Today earlier that they are “reviewing strategic options with potential partners to enhance Metro’s existing wholesale capabilities and accelerate the business development in India”.

Incidentally, amid the onslaught by leading business groups, such as Reliance of late, Metro needs to invest heavily in the Indian market to keep pace with the growth of its competitors and the rapidly changing retail landscape.