Synopsis

One of the persons aware of the development said German parent Metro AG is concerned about the regulatory environment in India and the ‘swadeshi versus videshi’ debate. Lobby groups representing Indian retail companies have upped the ante against overseas retailers, alleging violation of FDI norms, which the foreign companies have always denied.

Reuters
Thai conglomerate has matched valuation expected by Metro; final bids likely in a month.

Reliance Retail has submitted a non-binding bid of around Rs 5,600 crore to acquire Metro Cash and Carry’s India operations and assets, which are up for sale, said three industry executives aware of the development.

Thailand’s largest conglomerate, Charoen Pokphand (CP) Group, has placed a bid of about Rs 8,000 crore, or $1 billion, which almost matches the German wholesaler’s expectations. 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, said the people cited.

A Reliance spokesperson said as a policy, it will not comment on media speculation and rumours. “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,” the person said. CP Group did not respond to an email sent.

One of the persons aware of the development said German parent Metro AG is concerned about the regulatory environment in India and the ‘swadeshi versus videshi’ debate. Lobby groups representing Indian retail companies have upped the ante against overseas retailers, alleging violation of foreign direct investment (FDI) norms, which the foreign companies have always denied.

“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,” one of the persons said.

JP Morgan and Goldman Sachs are the merchant bankers of Metro Cash and Carry India, which has valued the business at about $1 billion. Final binding bids are likely to be submitted within a month, during which, according to some industry experts, the bid amount could change