German retail giant Metro Group has sold its Real grocery chain in eastern Europe to French retailer Auchan for EUR1.1bn (US$1.4bn).
The transaction, announced today (30 November), comprises Real’s operational activities in Poland, Romania, Russia and Ukraine as well as real estate assets. Real’s business in Turkey is not part of the deal as Auchan has no operations there and said it wants to “solely strengthen its already existing activities” in Eastern Europe with the acquisition.
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Metro said the move will allow it to focus on the “successful further development” of its domestic Real business, while at the same time “facilitating major growth opportunities for the business operations in Eastern Europe”.
“With Auchan, we found the most suitable buyer for Real’s business activities in Eastern Europe,” said Olaf Koch, chairman of Metro’s management board. “Real is already very well positioned in these countries and has great growth opportunities. Auchan offers good development perspectives for the Real hypermarkets and their employees.”
The sales includes 91 Real hypermarkets in Poland, Russia, Romania and Ukraine. Real has sales of over EUR2.6bn in those four countries and employs around 20,000 people, it said.
Metro will receive EUR600m in cash from the deal, which is expected to close next year.
Metro had repeated denied it was looking to sell off its Real hypermarket stores outside Germany as part of a restructuring of the business.
In July, Metro said it had received some interest in the international business of Real but said there had been “no concrete negotiations” and that no decision to sell the stores had been made.
Reports in October had linked Auchan, along with Russian retailer O’Key as two of three bidders in the running for the Real stores in Russia.
Metro shares climbed 2.8% to EUR22.20 at 13:51 GMT.
