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At Least Eight Second-Round Bids Expected for Metro’s China Operations

June 13, 2019
Andrew

According to Reuters and the technology channel of Tencent News, at least eight bidders are expected to participate in the second round of bids for a majority stake in the Chinese division of German wholesaler Metro AG. Metro has asked potential bidders to submit non-binding offers by June 10, and the entire bidding process is due to be completed by September.

In March, Reuters reported that Metro was planning to sell its business in China via tenders, with valuations ranging from $1.5 billion to $2 billion. Metro’s international supply chains are expected to be especially attractive to domestic bidders as they will allow access to premium imported products unavailable to rivals.

Sources familiar with the sale said that the bidders may include several consortia, such as private equity firm Boyu Capital with real estate developer Vanke, Hopu Investments with fresh food mobile e-commerce platform Meicai.com, and Hillhouse Capital Group with Yonghui Superstores. There are also rumors that Tencent Holdings Ltd. is considering joining the consortium with Yonghui Superstores, of which it is a shareholder.

Alibaba may also join the race and launch a bid with RT-Mart International. As early as 2015, Metro established a partnership with Alibaba, merging with Tmall International and cooperating in commodity supply chains, cross-border e-commerce, and big data. Consequently, Metro represents an important partner for Alibaba in developing its European strategy.

Other expected bidders include Walmart, electronics retailer Suning Holdings Group, supermarket operator Wumart Stores Inc., and private equity firm Primavera Capital Group.

Metro first entered the Chinese market in 1996 when it opened its first store in Shanghai. It currently has 95 stores and numerous properties in major cities such as Beijing and Shanghai. News of its asset restructuring has been frequently reported since last year.

In June last year, Metro engaged in discussions with Citibank and JPMorgan Chase regarding the development direction of its China business, intending to sell a small number of its Chinese operations or find partners in China, and said in a statement that it would consider various forms of cooperation, including mergers and acquisitions.

Image source: Baidu Images

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