At least 8 second-round bids seen for Metro's China unit

May 28, 2019 09:41
German retailer Metro is seeking a strategic partnership to maximize the growth potential of its Chinese business. Photo: Reuters

At least eight suitors are preparing second-round bids to buy a majority stake in German wholesaler Metro's Chinese operations, Reuters reports, citing people familiar with the matter.

Metro is said to have asked a shortlist of bidders to submit non-binding offers by June 10. The whole process is likely to conclude in September, sources were quoted as saying.

A deal could see the business valued in the US$1.5-2.0 billion range.

Bidders include the consortia of private-equity firm Boyu Capital with property developer China Vanke, Hopu Investments with fresh food delivery firm Meicai, and Hillhouse Capital with supermarket chain operator Yonghui Superstores, according to the report.

Chinese gaming and social media giant Tencent Holdings is said to be considering joining the race with Yonghui, of which it is a minority shareholder.

Also in the fray is Alibaba, which is reportedly working on a bid with Taiwan’s RT-Mart International. US retailer Walmart, which runs 400 hypermarkets in China, is another entity on the list, according to the Reuters sources.

Other bidders include Chinese electronics retailer Suning Holdings, supermarket operator Wumart Stores and private-equity firm Primavera Capital, sources said.

Metro told Reuters that it aims for a strategic partnership to maximize the growth potential of its Chinese business. It said it is speaking with potential partners and that it will narrow its list of suitors for further talks.

It declined to provide further details such as time frame or the identity of suitors, the report said.

The German wholesaler opened its first China store in Shanghai in 1996. It now employs 11,000 people across the country, and had sales of 2.7 billion euros (US$3.02 billion) in the financial year ended September 2018.

Property makes up the bulk of the value of Metro’s China business, people with direct knowledge of the matter previously told Reuters.

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