RIL to buy the German Company Metro’s Cash and Carry business in India

Tags: Economy/Finance

India’s largest private sector company Reliance Industries Ltd (RIL) is set to acquire German retailer METRO AG's Cash & Carry business in India in a deal estimated at around 500 million euros (Rs 4,060 crore).

The deal includes 31 wholesale distribution centers, land banks and other assets owned by METRO Cash & Carry in India.

METRO AG, which operates in 34 countries, entered the Indian market in 2003. 

What is a cash and carry business? 

Cash and carry business model is a type of wholesale trading where the customer pays in full for the goods it purchases and no credit is extended by the seller to the purchaser. The purchasers are small businesses, kirana stores etc.

METRO also operates in the wholesale  B2B(Business to Business) market  which includes retailers and kirana stores, hotels, restaurants and caterers , corporates, Small and Medium enterprises, companies and institutions as its  customers.

The B2B segment is considered to be a low-margin business and multinationals such as French Carrefour have already exited from the country.

 Reliance Retail is the subsidiary company of RIL which operates the retail business of Reliance and is the largest retail company in India. With the purchase of the METRO business Reliance Retail’s presence in the B2B segment will increase. 

Reliance Industries Limited (RIL)

Reliance Industries Limited was founded by Dhirubhai Ambani in 1973.

It is the largest private sector company in India 

Headquarters: Mumbai 

Chairman: Mukesh Ambani .