Alibaba is consolidating its wholesale business with the recent bid to acquire German wholesaler Metro AG. The tech giant is reportedly tussling with eight other firms to acquire the Chinese operations of Metro AG.
The news network said that the deal could see the value of Metro's Chinese operations at $1.5 billion to $2 billion. The operations of Metro is expected to transform the traditional wholesale and retail sectors into a maturing e-commerce market and big data capabilities through technology majors such as Alibaba Group Holding Ltd that are aggressively expanding offline
Other bidders of Metro's operations included the consortia of private equity firm Boyu Capital with property developer China Vanke Co Ltd, Hopu Investments with fresh food delivery firm Meicai, and Hillhouse Capital Group with supermarket chain operator Yonghui Superstores Co Ltd.
The fast expansion of companies like Alibaba, JD, and Meituan is expected to transform the retail experience in China through technology integration.
Currently, Alibaba has its own Supermarket chain in Hema and it holds shares in the Taiwanese firm RT-Mart International Ltd and the retail group Auchan. The partnership with Metro is expected to improve the existing retail operations of Alibaba.
According to analysts, the partnership might bring synergy to the business-focused strategies pursued by e-commerce firms. They also said that the companies are attracted to the supply chain of Metro overseas since it offers premium imported products that its rivals do not have access to.
According to sources, Metro has asked a short list of bidders to submit non-binding offers by June 10. They added that the whole process is likely to conclude in September. The sources also said that Tencent Holdings Ltd., a Chinese gaming and social media giant, plans to join the bid with Yonghui, of which it is a minority shareholder.
The sources also said that Chinese electronics retailer Suning Holdings Group, supermarket operator Wumart Stores Inc and private equity firm Primavera Capital Group are among the bidders of Metro.
The companies rumored to bid failed to comment regarding the claims. Metro first opened a Chinese store in Shanghai in 199 and it is currently employing 11,000 people across the country. Its website showed that its sales at 2.7 billion euros in the financial year ended in September 2018. The report of Reuters said that property makes up the majority of the value of Metro's operations in China.
