Metro sells Vietnam cash-and-carry unit to Thai firm for $879mn

Metro sells Vietnam cash-and-carry unit to Thai firm for $879mn

German retailer Metro AG has agreed to transfer its wholesale operations in Vietnam to a Thai company under a plan to streamline the company’s sprawling operations and improve profitability.

Reuters quoted people familiar with the Vietnam transaction as saying that Metro had not actively sought a buyer but was approached separately by Berli Jucker and convenience store chain CP All.

“We strongly believe that the proposed transaction will create long-term shareholder value for both parties,” Metro Chief Executive Olaf Koch said on Thursday.

The deal will boost Metro’s earnings before interest and taxation (EBIT) in the 2014/15 fiscal year by about 400 million euros ($534.41 million).

The money will reportedly be used to expand Metro operations in India and China, according to sources familiar with the matter.

Metro, Europe’s fourth-biggest retailer, inaugurated its first cash-and-carry store in Vietnam in 2002. The company now operates 19 stores countrywide with 3,600 employees, generating sales of 516 million euros in the 2012/13 fiscal year.

Berli Jucker is a major Thai import and export firm based in Bangkok with a market capitalization of 88 billion baht (roughly $2.8 billion).

The company has six representative offices in Southeast Asia, with 2013 revenue topping $1.3 billion.

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