Reliance Industries has paid INR 254 crore to Metro AG for utilizing the German retailer’s brand name in India during the financial year ending September 2023. This payment comes after Reliance’s acquisition of Metro AG’s wholesale chain in the country one year ago.
“Metro AG is providing certain transitional services and licences as part of the transaction to enable the new owner to operate the business. As part of the sale of Metro India, a licence payment of INR 28 million (INR 254 crore) received in advance for using the Metro brand is recognised in the financial year,” Metro said in its latest annual report.
Last December, Reliance Retail Ventures, a unit of RIL, executed a substantial acquisition by purchasing Metro Cash & Carry India for a total cash consideration of INR 2,850 crore. This comprehensive deal encompassed all 31 wholesale stores and the entire real estate portfolio across six store locations. The transaction was successfully concluded in May 2023. Notably, the wholesale and retail giant expressed that the evolving landscape marked by increased market consolidation, accelerated digitalization, and intense competition has led to a misalignment of Metro India’s business with its core growth strategy.
In the report, Metro stated that, taking into account the outgoing cash and factoring in the prepayment for the use of the Metro brand, the initial net cash inflow for the divested assets and liabilities totals INR 0.3 billion (INR 2,731 crore).
“However, positive Ebitda-effective earnings from disposal of its Indian business was INR 150 million (INR 1,363 crore), including transaction costs,” it added.
