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Metro in exclusive talks with X+Bricks consortium for hypermarkets sale

German wholesale group Metro AG said Dec. 5 that it is in exclusive negotiations with a consortium comprising investment firms X+Bricks and The SCP Group relating to the sale of its Real hypermarket business.

The parties entered into a memorandum of understanding, saying they aim to conclude the talks by Jan. 31, 2020, with the signing of the deal. The closing of the transaction would be subject to antitrust and other regulatory approvals.

The X+bricks-led group is looking to fully acquire Real's operating business, online marketplace and real estate portfolio, which includes 80 properties.

Metro expects net cash proceeds of about €500 million.

Under the proposed transaction, a core group of Real stores will continue to operate, but a large number of stores will be transferred and some individual stores will be closed. The planned transfer of stores to other retailers will take place subsequently and will be independent of the sale of Real to the consortium, Metro said.

In addition, all Real employees will be part of the transfer to the consortium.

With the announcement, Metro said it has ended negotiations with Redos Real Estate GmbH regarding the sale. Redos has been in exclusive talks with Metro on a potential deal for the hypermarket business since May.

The company said the improved offer submitted by the X+bricks-led consortium is the basis for the new exclusivity agreement and MOU.

"Among other things, the consortium has committed itself to dissolve its exclusive cooperation agreement with Kaufland. The MOU further provides for the continued operation of a core group of Real stores," Metro said. "The majority of stores will be transferred to other retailers. It is the intention to contractually oblige these retailers to take over the Real employees."

In March, it was reported that Metro was in discussions with several retailers for the sale of Real hypermarket chain.