Metro Group sells Real Eastern Europe for Euro 1.1 billion to Auchan

With this move, Real now focuses on the successful further development of its German business while at the same time facilitating major growth opportunities for the business operations in Eastern Europe, the company said. The purchase price amounts to Euro 1.1 billion (US-$ 1.43 billion). Metro said it will receive a cash inflow of around Euro 600 million (US-$ 780 million) from the transaction, and reduce the rating-relevant net debt significantly by Euro 1.5 billion (US-$ 1.95 billion). The divestment is subject to approval by the relevant antitrust authorities and will probably be closed in 2013.

The sale of Real Eastern Europe to Groupe Auchan comprises 91 Real hypermarkets in Poland, Russia, Romania and Ukraine as well as the real estate assets of 14 stores. In these four countries, Real has recorded sales of more than Euro 2.6 billion (US-$ 3.38 billion) in 2011 and has a workforce of around 20,000 employees. Auchan operates 98 stores and has a workforce of around 65.000 employees in these four countries.

Vianney Mulliez, Chairman of the Board of Directors of Groupe Auchan, commented: “With the purchase of Real’s business activities in the four countries, Groupe Auchan takes the opportunity to balance its presence in Central and Eastern Europe, its two other priority development zones being Western Europe and Asia. It is also an opportunity to offer an even better service to our customers, with very professional teams, both in Real and Auchan, that we fully trust.” In future, the Real hypermarkets in Eastern Europe will operate under the Auchan brand.

“With Auchan, we found the most suitable buyer for Real’s business activities in Eastern Europe,” added Olaf Koch, Chairman of the Management Board of Metro AG. “Real is already very well positioned in these countries and has great growth opportunities. Auchan offers good development perspectives for the Real hypermarkets and their employees.”

Real’s business activities in Turkey are not part of this transaction as Auchan has no operations there and wants to solely strengthen its already existing activities in Eastern Europe with the acquisitions. According to a press release, the Real operations in Turkey remain unaffected by any changes: “The business activities of Real in Turkey have developed very nicely in recent years and show great growth potential. This is now to be consequently tapped”, said Koch. “Real Germany forms an integral part of the portfolio of METRO GROUP. We are convinced of the potential inherent in the hypermarket business in Germany. In collaboration with the management of Real we are currently working on an action plan to leverage the existing earnings potential and to sustainably increase profitability.”