Reliance Retail Ventures (RRVL), a subsidiary of Reliance Industries (RIL), will acquire 100% stake in German firm Metro AG’s wholesale operations in India — Metro India (Metro Cash and Carry India) – for a total cash consideration of Rs 2,850 crore. The transaction is expected to be completed by March 2023, RIL said in a press statement.

Metro India started operations in India in 2003 and was the first company to introduce a cash-and-carry business format in the country. Currently, it operates 31 wholesale distribution centres under the brand METRO Wholesale across 21 cities. These include six in Bengaluru, four in Hyderabad, two each in Mumbai and Delhi, and one each in Kolkata, Jaipur and Jalandhar, among other cities. It has around 3,500 employees.

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Steffen Greubel, CEO of METRO AG, said, “With Metro India, we are selling a growing and profitable wholesale business in a very dynamic market at the right time.”

Isha Ambani, director, RRVL, said: “The acquisition of Metro India aligns with our new commerce strategy of building a unique model of shared prosperity through active collaboration with small merchants and enterprises… We believe that Metro India’s healthy assets combined with our deep understanding of the Indian merchant/kirana ecosystem will help offer a differentiated value proposition to small businesses in India.”

The RIL stock was down marginally by 0.65% and closed at Rs 2,577.90 on Thursday.

Metro India, a business-to-business cash-and-carry wholesaler, has over 3 million B2B customers in India through its store network and eB2B app. Its customers include kiranas, hotels, restaurants, caterers, corporates, SMEs, offices, companies and institutions.

Through this acquisition, Reliance Retail will get access to a wide network of Metro India stores located in prime locations across key cities, a large base of registered kiranas and other institutional customers and a strong supplier network.

The acquisition will further strengthen Reliance Retail’s physical store footprint and ability to better serve consumers and small merchants by leveraging synergies and efficiencies across supply chain networks, technology platforms and sourcing capabilities.

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In the financial year 2021-22 (FY ended September 2022), Metro India generated sales of Rs 7,700 crore.

The Indian retail market is growing at an 8% CAGR and is expected to become a $1.3-trillion market by 2025, according to a Bernstein report. While the retail mix is dominated by the unorganised sector at a 75% share by 2025, the mix is changing with organised retail gaining share at 15% and e-commerce accelerating at 10% by 2025, the report said.

RRVL is already one of the biggest retailers in India with around 16,000 stores across the country.

Earlier this month, RRVL’s wholly-owned subsidiary Reliance Consumer Products, launched its consumer packaged goods brand – Independence – in Gujarat, following the announcement at the company’s 45th annual general meeting in August that it would foray into the FMCG space this year.