Metro Group Real in sales talks

Metro Group is said to be preparing for the sale of its hypermarket chain Real. According to Lebensmittel Zeitung, sale talks with financial investors are currently underway, with Real an interesting target for them as the chain has been completely refurbished, with underperforming hypermarkets closed and costs reduced.

However, nothing concrete is in place yet, as Metro – which is looking to sell the chain as a whole – is only at the discussion stage. One point of contention is said to be the high rents being asked by landowners at Real locations, as the majority of the banner’s sites do not belong to Metro Group.

Due to competition law, any buyers for the chain are likely to be foreign. Walmart has been cited as a prime candidate, although this is rather unlikely since the retailer has previously failed in Germany. That said, Walmart is a very different business now, and is far more flexible in terms of formats, merchandising and local management.

An acquisition by Walmart could be used as a springboard for expansion into Central and Eastern Europe, with Poland and Russia in particular quite attractive for the retailer. Moreover, Walmart’s preferred market entry method is through acquisition, so it may be looking for opportunities – and is certainly not short of cash – but unlike Carrefour, Walmart is not a ‘flag planter’ and is unlikely to make a move unless the targeted business is truly a good fit. Walmart did consider a Russia market entry but closed the Moscow office it had set up there after recognising that the country was not ripe for entry.

Aside from Real, Metro Group-owned Kaufhof is looking at launching on the stock market this autumn, economic conditions dependent.