Reliance, Swiggy, and PremjiInvest join bid to buy Metro India
What's the story
The race to purchase the Indian operations of German retailer Metro AG has become competitive, with several parties joining in.
Reliance Retail, Thai conglomerate Charoen Pokphand (CP) Group, Swiggy, and PremjiInvest are some of the interested players.
To recall, Metro had announced last month that it wants to wind up its Indian business and is in touch with 10 interested parties for its buyout.
Context
Why does this story matter?
Metro operates 31 cash-and-carry stores in India. In FY21, the company hit a turnover of Rs. 6,738.3 crore and expects to end the current fiscal with revenue in excess of $1 billion.
However, its parent company does not want to spend Rs. 2,310 crore to ward off its competitors like Reliance.
This is a perfect opportunity for its rivals to shine.
List
Which companies have shown interest in investing?
Mukesh Ambani's Reliance Retail, food delivery platform Swiggy, and Thailand's largest business group Charoen Pokphand (CP) Group seem interested in a $1-1.5 billion buyout.
PremjiInvest, an investment fund managed by Azim Premji's family office is also a potential buyer.
Finally, private equity fund Bain Capital and Tata Group are examining the opportunity but are yet to make a decision.
Plans
Swiggy wants to diversify its business
Swiggy, Reliance, and CP Group can strengthen their e-commerce play, wholesale division, or an India entry, respectively if they acquire Metro's operations here.
Swiggy wants to expand beyond its core business of deliveries from restaurants and also to hasten the growth of Instamart.
Reliance and Tata see it as a means of backward integration, while PremjiInvest's strategy involves investment in new-age consumer businesses.
Information
PremjiInvest might join a partnership to acquire the company
The submission of non-binding offers will commence this week. Once they are received, they will be thoroughly inspected. PremjiInvest is likely to join hands with shortlisted candidates to pursue a deal. Amazon and Walmart may also take similar steps.