METRO AND REDOS ENTER INTO EXCLUSIVE NEGOTIATIONS FOR SALE OF REAL
8th May 2019
· Exclusivity until the end of July; negotiations expected to be completed in the summer
· Enterprise value of approximately €1 billion, equity value of approximately €0.5 billion,expected cash inflow of approximately €0.5 billion
Status of negotiations will lead to €385
million impairment of the hypermarket business in METRO’s half-year financial
Düsseldorf, 08 May 2019 – The sale process of Real is entering a decisive phase: METRO and a consortium led by redos have entered into exclusive contract negotiations based on a jointly agreedframework concept. Following a comprehensive due diligence review, the aim is to sign a definitive contract in the summer.
The framework concept the parties have agreed on stipulates the sale of Real as a whole to redos. METRO will initially retain a 24.9 % stake in Real's operating business but will have a put option that can be exercised after three years at the earliest. The current status of negotiations implies anenterprise value of around €1 billion and an equity value of around €0.5 billion. Real's liabilities will be assumed by the new owner, resulting in a preliminary cash inflow of around €0.5 billion for METRO. The current status of negotiations will also lead to a €385 million impairment in METRO's half-year financial statements.
Olaf Koch, CEO of METRO AG, said: “In September 2018, we started
the sales process for Real, aiming to focus METRO entirely on wholesale and to
sell the hypermarket business as a whole. The exclusivity agreement has brought
us one step closer towards this goal. In the consortium led by redos, we have
found a strong and experienced partner who, in our view, presented the most
convincing concept for Real's realignment. As a minority shareholder, we are
prepared to continue and accompany the company's further development
responsibly for a defined period of time, as we continue to focus on
The buyer's concept is based both on
extensive investments and on an adjustment of the store network. The details of
the realignment will be jointly developed with the management of Real during
the exclusivity phase.
Oliver Hermann, managing director of redos, added: “We are pleased that we were able to convince METRO with our concept for Real. redos is an independent company with comprehensive restructuring and real estate expertise in large-scale retail. We have known Real for many years, including as a landlord of Real locations. Together with the Real management, we
intend to use our expertise to successfully realign the store
network. To the extent that this includes the sale of individual locations, we
will place a special emphasis on taking over employees.”
The management of Real commented: “We welcome the fact that METRO and redos have signed an exclusivity agreement. We value redos as a longstanding and reliable business partner. Now it will be important to swiftly complete the sale process.”
The signing of the definitive contracts would be subject to the approval of the anti-trust authorities. Likewise, the boards of METRO and the consorti-um led by redos would have to approve the conclusion of the contracts.