German wholesaler Metro AG said on Tuesday it has reached a deal with a consortium consisting of property investors X+Bricks and the SCP Group for the sale of its struggling Real hypermarkets unit.
As part of the agreement, the company will exit the business at an enterprise value of 1 billion euros ($1.09 billion). It had entered talks with the consortium to sell the unit in December.
Late last month, sources close to the matter told Reuters that Metro had pushed back expectations to conclude the deal.
The German wholesaler has been selling off non-core assets in recent years to focus on its European cash-and-carry business supplying hotels, restaurants and independent traders.
In October last year, the company had also agreed to sell a stake in its Chinese operations to local operator Wumart.
The company said on Tuesday it expects net cash flow of about 300 million euros, adding that it continues to expect 1.5 billion euros from the sale of Real and the majority stake in its China business.
The deal will lead to an estimated one-off cost of 200 million euros in the financial years 2019-20 and 2021-22, Metro said.
A binding agreement is yet to be concluded and certain “open issues” are still under negotiation, the statement added without specifying what those issues are.
Source: Reuters.com