Metro AG has reached a deal with Wal-Mart to acquire 85 German hypermarkets from the world’s largest retailer. The business employs more that 11,000 people and generated sales of EUR2bn in 2005. Terms of the deal were not disclosed.
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Metro said that the takeover means that it has “a very effective coverage of the German market”. Under the Real banner, Metro currently operated 550 hypermarkets and supermarkets in Germany.
“With this acquisition we complement our store network and increase our power in the German market”, said Dr. Hans-Joachim Körber, CEO of the Metro AG, today (28 July). “Through the strengthening of our market presence we will generate noticeable synergy effects. It is also a clear commitment that we believe in the hypermarket business as an effective sales format.”
Metro said that it is currently pushing its international expansion, building on acquisitons in Poland and Turkey, Real recently opened its first stores in Russia and Romania. Metro recently announced the planned takeover of the Polish hypermarket activities of French retailer Géant.
Michael Duke, vice-chairman of Wal-Mart Stores, said that the sale represented a strategic retreat from the challenging German market.
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By GlobalData“As we focus our efforts on where we can have the greatest impact on our growth and return on investment strategies, it has become increasingly clear that in Germany’s business environment it would be difficult for us to obtain the scale and results we desire. This sale positions us to increase our focus on the markets where we can achieve our objectives,” Duke said.
Wal-Mart said it expects to incur a pre-tax loss related to this transaction of approximately US$1bn for the company’s second quarter of fiscal year 2007.
The sale is subject to regulatory approval.
