Berli Jucker Public Company Limited (BJC) of Thailand, a diversified supply chain logistics, food manufacturing, trading and retail distribution group headquartered in Thailand, has signed an agreement to acquire the Metro Cash & Carry wholesale business in Vietnam from the Metro Group. The €655 million ($876 million) deal buys the Düsseldorf, Germany-headquartered company’s complete operation in the Southeast Asian nation, consisting of 19 wholesale stores in 14 cities and the related real estate portfolio.
The wholesale stores offer a broad range of products, including frozen foods, customized to meet the specific demands of hotel and restaurant operators, catering firms, independent small retailers, institutions, offices and other customers.
Metro’s share of the modern grocery market in Vietnam, where it has been active since 2002, is said to be approximately 22%. It ranks as the largest foreign-owned retail concern in the country and the No. 2 player overall, operating almost 110,000 square meters of selling space and ringing up €516 million in receipts last year.
BJC has been active in the nation’s retail food market since early 2013, having acquired a 100% stake in FamilyMart Vietnam from Japanese shareholders. Today it is doing business as B’s Mart.
The latest acquisition broadens BJC’s convenience store profile with a larger-scale format retail grocery presence, and further enhances its growth opportunities. “It is consistent with our existing strategy to become a leading regional player covering the entire value chain and be well positioned for the ASEAN Economic Community (AEC) era,” stated the company in a letter sent to the Stock Exchange of Thailand (SET).
For Metro, according to a number of analysts, cash realized from the sale will help offset sluggish volume at some of its department stores and electronics retail outlets in Europe.
“This transaction will allow us to invest into the further growth of Metro Group and further strengthen our balance sheet,” said Otto Koch, chairman of the management board of Metro AG. “We have always made very clear that one part of our strategic direction is to be more focused and continue to improve our performance as a group. This requires us to make choices and in this particular situation we are convinced, that through this transaction we will enhance our flexibility and readiness to implement our various initiatives throughout Metro Cash & Carry. Asia will remain as important as ever…”
“The transaction is a reminder of some of the significant value ‘hidden’ in the business, notably in property assets,” Andy Gwynn, an analyst at Exane BNP Paribas, pointed out to clients. Noting that the sale nets Metro about 1.25 times the Vietnam unit’s annual sales, he added, “It remains to be seen if Metro can repeat the sales multiple on a wider scale. Vietnam was probably one of Metro’s least-developed markets.”