RIL, PremjiInvest, Swiggy eye to buy Metro India unit; Amazon, Flipkart out of $1.5 billion deal for now

German retailer Metro wants to wind up its India operations, and it was in touch with about 10 potential companies including Reliance, CP Group, Flipkart and DMart.
Representational image.

Representational image.

New Delhi: The race to acquire the India business of German retailer Metro AG has become intense as Reliance Retail, the retail arm of Mukesh Ambani-controlled oil-to-telecom conglomerate, Thailand’s largest conglomerate Charoen Pokphand (CP) Group and food delivery platform Swiggy and PremjiInvest, the investment fund managed by the family office of Indian tech billionaire Azim Premji, have thrown their hats into the ring.
Further, the Tata Group and private equity fund Bain Capital are examining the $1-1. 5 billion buyout chance but are yet to make up their minds, people with knowledge of the matter told ET.
The submission of non-binding offers is slated for this week. Currently, Flipkart-Walmart, DMart and Amazon have decided not to enter the race. A thorough due diligence process will begin following the non-binding offers are received with the company offers expected in two months.
Earlier, reports surfaced that Metro wants to wind up its India operations, and it was in touch with about 10 potential companies including Reliance, CP Group, Flipkart and DMart.
Marquee investors such as PremjiInvest are expected to be open to joining shortlisted candidates. Amazon and Walmart might follow a similar strategy, although they are not interested in the bidding process, at present. JP Morgan and Goldman Sachs are the advisors to Metro.
It is important to mention in this context that for Reliance, CP Group and Swiggy, Metro provides the opportunity to strengthen the wholesale retail, e-commerce play or an India entry.
Thai conglomerate CP Group has merged operating companies of its Lotus (formerly Tesco stores) and Makro retail chains to create a stronger entity in an attempt to enter forging markets.
Food deilvery startup Swiggy wants to grab Metro’s national space to expand beyond core restaurant delivery as well as accelerating Instamart’s growth. For entities like Reliance or Tata, this would be part of backward integration.
New-age consumer businesses are crucial to PremjiInvest’s investment strategy, having supported fashion apparel e-tailer Myntra, Tata group's retail firm Trent, and apparel chain Shoppers Stop among others at various points.
End of Article