(Bloomberg) – Reliance Industries Ltd. is in advanced talks to acquire Germany’s Metro AG’s wholesale business in India, according to people familiar with the matter, as the billionaire-led conglomerate Mukesh Ambani seeks to dominate India’s massive retail sector.
Charoen Pokphand Group Co. is no longer actively in talks with Metro, leaving only Reliance of Ambani to pursue the so-called cash-and-carry business, the people said, asking not to be identified as the information are private. A final decision could emerge as early as next month, one of the people said.
A deal could value the company between $1 billion and $1.2 billion, including debt, another person said. Discussions between Reliance and Metro regarding details, including valuation, are ongoing and could fall apart, the sources said.
Representatives for Metro and Reliance declined to comment, while a spokesperson for CP Group did not immediately respond to requests for comment.
Metro entered the Indian market in 2003 and currently operates 31 wholesale fulfillment centers across the country, serving business customers only, according to its website. Its main customers include hotels, restaurants as well as different types of businesses such as small retailers.
Reliance is already the country’s largest bricks-and-mortar retailer, and a strong wholesale unit would further bolster its operations in India. Besides CP Group and Reliance, the potential sale of Metro’s cash-and-carry business had also attracted interest from Amazon.com Inc., Bloomberg News reported in July.
(Updates with company’s response to fourth paragraph.)
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