Meicai, Wumart among shortlisted bidders for Metro’s $1.5b China ops

Meicai application. Photographer: Justin Chin/Bloomberg

Meicai, a Chinese startup that helps farmers sell vegetables to restaurants, and supermarket operator Wumart Stores Inc. are among firms picked for the next round of bidding for German food wholesaler Metro AG’s $1.5 billion Chinese business, people with knowledge of the matter said.

Local grocery chain Yonghui Superstores Co. and Suning Holdings Group, the parent company of Chinese electronics retailer Suning.com Co., were also invited to make second-round offers, the people said. Bids are expected to be submitted by late May or early June, said the people, who asked not to be identified as the information is private.

Meicai and Hopu Investment Management Co. are in talks for a potential joint bid, according to the people. The startup is also considering partnering with other Chinese buyout firms, one of the people said. Wumart has separately been weighing whether to team up with a private equity firm, another person said.

Metro kicked off its sale of a controlling stake in the Chinese unit in March and collected first-round bids earlier this month, Bloomberg News has reported. It is willing to sell as much as 80 percent of the Chinese business while retaining a significant minority if an attractive offer is made, people familiar with the matter have said.

The German retailer joins other multinational consumer groups in rejigging its China business. McDonald’s Corp. sold control of its China and Hong Kong operations to an investor group including state-backed conglomerate Citic Ltd. for about $1.7 billion in 2017. Yum! Brands Inc., the operator of KFC and Pizza Hut restaurants, carved out its Chinese operations into a separately-listed company in 2016.

“We have started a formal process of conversations with a number of potential partners which is progressing very well,” Metro said in an emailed statement in response to Bloomberg queries. “Metro now will significantly narrow the list of partners for further talks.” The company declined to comment further.

Representatives for Meicai and Hopu declined to comment. Officials for Suning and Yonghui didn’t respond to calls and emails seeking comment, while calls to Wumart’s office went unanswered.

Meicai, which means “beautiful vegetable,” was founded in 2014 by rocket scientist Liu Chuanjun. It raised at least $600 million in a funding round led by Tiger Global Management and Hillhouse Capital last year, which valued the startup at about $7 billion, Bloomberg News reported in October.

Metro’s Cash & Carry business in China spans 95 stores and reported revenue of 2.7 billion euros ($3 billion) in the 2017-2018 financial year, according to its website.

Also Read:

China’s vegetable-selling app Meicai said to raise more than $600m

Metro AG’s $1.5b China unit sale attracts Tencent, Citic PE

Bloomberg