HONG KONG (Reuters) – German wholesaler Metro AG has kicked off the sale of its China operations by calling for bids, in a deal that would value the business at between $1.5 billion (1.1 billion pounds) and $2 billion, two people with direct knowledge of the deal said.
Metro, which owns 95 stores in China and real estate assets in major cities such as Beijing and Shanghai, is planning to offload a majority stake in its China business, said the people.
The sale move is part of a global reorganisation of the wholesaler and comes as China’s wholesale and retail sectors are experiencing disruption from e-commerce players.
Metro’s China business could yet be valued at up to $3 billion, said two separate sources with direct knowledge of the matter.
Potential bidders include electronics retailer Suning Holdings Group, supermarket chain operators Wumart Stores Inc and Yonghui Superstores, according to three of the people.
Private equity firms such as Hillhouse Capital Group and Bain Capital are also studying a potential deal, they added.
Property makes up the bulk of the value in Metro’s China business, the people said, cautioning, however, that there is a large gap between price expectations among buyers and the seller.
A Metro spokeswoman in Germany said the company is in talks with potential partners concerning the further development of its China business but declined to comment on details of its exchanges with potential partners or the sale process.
Bain and Suning declined to comment. Yonghui and Hillhouse did not immediately respond to requests for comment. Calls to Wumart went unanswered.
First-round, non-binding bids are due in the second week of April, said two of the people. Citigroup and JPMorgan are advising Metro, the people said. The banks declined to comment.
Source: Reuters
CHINDIA ALERT: You'll be living in their world, very soon 