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Metro's Real Hypermarket Sale Instigates Talk of Amazon Interest

Metro's Real Hypermarket Sale Instigates Talk of Amazon Interest


BERLIN, GERMANY
Friday, September 14th, 2018

Talk has arisen that German retailer Metro AG plans to sell its struggling Real hypermarket chain, worth a purported $1.2 billion. Some analysts suggest that this sale could attract interest from potential buyers—including e-commerce giant Amazon. Since it acquired Whole Foods last year for $13.7 billion, Amazon could be interested in additional food retailers.

According to a report from LiveMint, potential buyers have been leery to enter the German grocery market since Walmart took a loss of $1 billion after it sold its stores to Metro. The retailer subsequently pulled out of the country in 2006.

Bruno Monteyne, Senior Analyst, European Food Retail, Bernstein“Germany’s grocery e-commerce is very underdeveloped and Germany is a very important country for Amazon,” said Bernstein analyst Bruno Monteyne, adding that a likely price tag of around $1.2 billion would be of little consequence to Amazon.

Metro AG CEO Olaf Koch said earlier that talks with interested parties had not come at the right time as Metro began restructuring its business. The retailer said that it wanted to focus on its wholesale business, which serves independent traders, hotels, and restaurants and is more shielded from e-commerce, while doing more delivery to customers. LiveMint reported that the wholesale food business has higher margins than grocery retail, and is growing faster as people spend more on eating out rather than cooking at home.

Talk has arisen that German retailer Metro AG plans to sell its struggling Real hypermarket chain, worth a purported $1.2 billion

Koch also noted that Metro had seen “express interest from a number of parties,” but that the sale process could take up to eight months.

An Amazon spokesman declined to comment.

Will Amazon swoop in and surprise the grocery sector with another acquisition? Deli Market News will continue to follow the latest.

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