Reliance Retail has submitted a bid of Rs 5,600 crore to acquire German retailer Metro AG's India subsidiary, Metro Cash & Carry, which is looking to exit the Indian market.
Competing with Reliance is Thailand-based Charoen Pokphand Group, which has placed a bid of Rs 8,000 cr, The Economic Times reported.
Metro India gave detailed presentations on performance and growth potential to senior teams from the two bidders in the presence of merchant bankers in Bengaluru two weeks ago, the report said, citing people in the know.
Metro Cash & Carry India currently operates 31 stores in the country under the brand Metro Wholesale.
"Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges," a Reliance spokesperson told the publication.
Reliance appears to have an edge against the Thailand-based conglomerate owing to the "swadeshi vs videshi" debate that has spread across the Indian industry in recent times. “Against this background, Reliance has an edge over others because it is the only Indian company serious about buying Metro India. Thailand’s CP Group is also hugely interested because it already has a presence in India through Lots Wholesale outlets,” an executive said.
Traders' body CAIT on Thursday accused Metro AG of fund diversion and violating FDI regulations in India, a charge which the German retailer rejected as "false and malicious".
"As per the media reports Metro Germany is looking to sell the India business and make profits of over Rs 10,000 crore on its investment in India which is nothing but the diversion of funds by accruing huge profits in India in past years," CAIT said in a statement.
The traders' body alleged Metro was "blatantly operating a B2C business" in the garb of cash-and-carry operations, in complete violation of FEMA and GST laws, making a "mockery" of the system.
A METRO AG spokesperson told DH, "METRO has been operating in India since 2003 and has worked towards making small and independent businesses, especially kiranas successful and profitable through our robust network of wholesale stores. METRO has been actively advocating about creating a level playing field for all players in the retail sector to protect the interest of small retailers and kiranas. In the last 19 years of operation, we have had an impeccable track record w.r.t regulatory compliance and have been fully compliant with the applicable FDI regulations and laws of India. Therefore, we condemn the false and malicious allegations being made on us with vested interest. We question the veracity of such false data which is maliciously being used by CAIT. As a leading global organization, we are governed by robust processes, ethics and governance mechanisms to ensure compliance with local policies and procedures."
(With PTI inputs)
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