Metro to stay in Vietnam after store chain sale
Metro to stay in Vietnam after store chain sale
Germany’s Metro AG will stay in Vietnam by launching a new business after it sells its wholesale store chain to a Thai firm.
CFF supplies food for high-end hotels and restaurants in mega cities in Asia and the Middle East, including HCMC. It also serves airlines, supermarket chains and delicatessen stores.
“The transaction covers the operations and all fixed assets of CFF for an enterprise value of US$290 million plus an earn-out of up to US$38 million depending on the EBITDA performance in 2015-2017,” Metro said in a statement on its website.
With such a move, the German group might not withdraw from the Vietnamese market when transferring the entire Metro Cash & Carry chain in Vietnam to Thailand’s Berli Jucker Public Company Limited (BJC) under a deal worth 655 million euros disclosed last August.
According to Metro, the acquisition of CFF strengthens Metro’s wholesale subsidiary Cash & Carry with dedicated FSD capabilities.
CFF is present in 25 cities across 14 markets, including Singapore, Dubai, Hong Kong, Bangkok, Kuala Lumpur, London, Jakarta and HCMC. The acquisition will increase the presence of Metro Cash & Carry from 26 to 36 countries and territories.
Operations of CFF cover sourcing and procurement, import and export, storage and handling, marketing and distribution of high-end fine food products such as dairy, meat, pastry, seafood, high-quality perishables, condiments, pasta and dry products to serve the daily needs of hotels, restaurants and caterers in mega cities.
“Metro Cash & Carry aims to strongly expand its FSD operations. With the acquisition of CFF we strengthen our value proposition and enlarge our wholesale market presence fuelling future sales and earnings growth,” Olaf Koch, chairman of Metro AG, said in the statement.
The deal to transfer the Cash & Carry wholesale chain in Vietnam to BJC was originally scheduled to conclude in the first half of this year. However, the parties concerned have not completed legal procedures for the deal so far.
Official information about the progress of the acquisition deal is not disclosed.
Such a delay might have resulted from oppositions of BJC shareholders. According to Bangkok Post, early this year BJC shareholders expressed concerns over possible financial and legal risks if the company kept pursuing the deal.
Right after that, TCC Holding, BJC’s largest shareholder, said it would renegotiate with Metro over the deal. If BJC shareholders continue rejecting the deal, TCC may solely buy Metro Cash & Carry Vietnam.
Metro Cash & Carry Vietnam now has 19 wholesale stores across the country.
