Reliance Retail Ventures, a unit of RIL, acquired Metro Cash & Carry India for ₹2,850 crore, encompassing all 31 wholesale stores and the entire real estate portfolio of six store locations. The completion of the sale occurred in May 2023.
In the financial year concluding in September 2023, Reliance Industries paid Metro AG ₹254 crore for the use of the German retailer’s brand name in India, a year after acquiring its wholesale chain in the country. Metro AG is furnishing specific transitional services and licenses to facilitate the new owner in operating the business.
Metro AG Recognizes 254 Crore License Payment
Metro AG, in its latest annual report, stated that it recognized a license payment of 28 million (254 crores) in advance for using the Metro brand as part of the transaction. This payment enables the new owner to operate the business and is associated with the sale of Metro India.
In December, Reliance Retail Ventures, a unit of RIL, finalized the acquisition of Metro Cash & Carry India for a total cash consideration of 2,850 crore. The deal encompassed all 31 wholesale stores and the entire real estate portfolio of six store locations. The completion of the sale occurred in May 2023. Metro, the wholesale and retail giant, stated that the increasing level of market consolidation, accelerated digitalization, and intense competition have rendered Metro India’s business no longer aligned with its core growth strategy.
METRO India Business Shift
The multinational stated in its annual report that METRO India’s business no longer aligns with METRO’s core growth strategy due to increased market consolidation, accelerated digitalization, and intense competition.
In its report, Metro AG disclosed that considering outgoing cash and the prepayment for using the METRO brand, the preliminary net cash inflow for the disposed assets and liabilities amounted to €0.3 billion (₹2,731 crore). Metro AG added that the positive EBITDA-effective earnings from the disposal of METRO India total €150 million, including transaction costs. This amount is fully attributable to the segment East and is allocated to transformation gains as a portfolio measure.
Furthermore, it stated that the components of other comprehensive income from currency translation differences, attributable to METRO AG shareholders, still included in the equity of METRO India until the de-consolidation date, had an effect of €−44 million in the financial result due to de-recognition through profit or loss.