After spending a lot of money to win the Metro, can Wumei really operate?
The highly anticipated Metro acquisition has finally come to fruition.
On October 11, 2019, METRO Group, Wumart Group and Dodge Dmall jointly announced that Wumart had signed a definitive agreement with Metro Group for the acquisition of Metro China. After the transaction is completed, Wumart Group will hold 80% of the shares in the joint venture established by the two parties, and Metro will continue to hold 20% of the shares. More points will become a technology partner of Metro China.
According to the agreement, Metro China will continue to operate independently under the “Metro” brand. The joint venture will retain its existing staff team in addition to the current management team led by Kant. The Metro Group will receive two seats in the board of directors of the new joint venture company and will continue to play a role in the governance of the joint venture.
However, the amount of the transaction was not disclosed by both parties. According to Reuters’ previous report, Metro’s valuation in China’s transaction is 1.9 billion euros. If 80% of Wumart’s shares are all cash purchases, the amount of the transaction is estimated to be 1.52 billion euros, equivalent to about 11.9 billion yuan. Previously, Carrefour sold a total of 4.8 billion yuan in Suning.
After the completion of the acquisition of Metro, Wumei also formed the layout of the offline full-service scene of “Shangchao+Department Store+ Hypermarket+Convenience Store”; for Metro, it has finally succeeded in the Chinese market after many years of struggle, and Selling a good price, this is a win-win “collusion.”
Yong Hui defeated
Before the official results came out, Yonghui was obviously the louder party. Especially after the failure of the acquisition of Carrefour, it was widely believed that Yonghui was in a certain position, but it is clear that Yonghui’s calculations have not started.
This kind of guess is not unreasonable. Compared with Wumei, Yonghui has an advantage in the main business of supermarkets. In the 2018 China Top 100 Chain List, Yonghui ranked fourth, while Wumei ranked eighth, and Yonghui’s sales were more than twice that of Wumei.
Since its establishment, Yonghui has been deeply cultivating the fresh supply chain. Previously, it was analyzed that Yonghui was a retailer that focused on building an upstream and downstream integrated vertical supply chain. After the acquisition of fresh food (mainly fresh B2B supply chain), Yonghui complemented its short-board in the B2B supply chain, but all B-end supply chains will eventually need to find stable customer resources and form a closed loop of self. From this point of view, Metro is exactly what Yonghui needs.
As we all know, Metro is a warehouse-style hypermarket, and the main customers are B-end customers such as units and small and medium-sized enterprises. Metro’s China President Kant has said that 40% of Metro’s sales come from professional B2B sales.
And, Metro has more B-side users and is more sticky.