German conglomerate Tengelmann, the owner of US retailer A&P, has sold control of its Plus business in Germany.
Edeka, the German retail group, is to become the majority shareholder in a venture with Tengelmann.
Edeka will take a 70% stake in the venture, which will run its Netto discount outlets and Tengelmann’s Plus stores. The venture will run around 4,200 stores in total, generating annual sales of about EUR11bn (US$16.1bn).
The deal brings to a close months of speculation over Tengelmann’s plans for its domestic Plus business.
Tengelmann, which will hold a 30% stake in its venture with Edeka, has been searching for a partner to breathe new life into its 2,900 Plus stores in Germany.
Tengelmann had held talks with Rewe over a possible tie-up but executive director Karl-Erivan Haub said the company had chosen “Germany’s number one food retailer” as a partner.
Haub said: “For me, a partnership with Edeka makes a lot of sense. Both sides want a real partnership, in which each brings its strengths.”
Edeka chairman Alfons Frenk added: “The cooperation with Tengelmann reinforces our position as the number one in Germany.” Frenk refused to disclose how much Edeka had paid for its stake in the venture.