German retail and distribution giant Metro said Thursday it has agreed to sell its cash and carry hypermarkets in Vietnam to Thailand's Berli Jucker for 655 million euros ($876 million).
"Metro has today signed an agreement with Thailand's Berli Jucker Public Company, according to which the Thai diversified supply chain group will acquire (Metro's) complete wholesale business in Vietnam," the German company said in a statement.
"BJC will take over the complete operational business of Metro Cash & Carry Vietnam including all 19 wholesale stores and the related real estate portfolio for an enterprise value of 655 million euros," the statement said.
The sale, which was still subject to approval from the relevant authorities, is expected to add several hundred million euros to underlying earnings in the 2014-15 financial year, Metro added.
German retailer Metro AG is in advanced talks to sell its cash-and-carry unit in Vietnam to Thailand's Berli Jucker for more than $500 million, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
Europe's fourth-biggest retailer opened its first cash-and-carry store in Vietnam in 2002 and now operates 19 stores across the country with around 4,000 employees, generating sales of 516 million euros ($692 million) in the 2012/13 fiscal year.
The Journal said Berli Jucker had approached Metro about the business last year, according to people familiar with the talks.
A Metro spokeswoman declined to comment on the report.
The cash-and-carry business, which sells wholesale to customers such as hotels, restaurants and independent retailers, accounts for about half of the Metro group's sales, with over 750 stores in 28 countries in Europe and Asia.
Metro also runs Europe's largest consumer electronics chain Media-Saturn as well as Real hypermarkets and Kaufhof department stores in Germany, but has been trying to streamline the business to focus on cash-and-carry and consumer electronics.
Shares in the company, which had fallen sharply after Metro announced fiscal third-quarter results last Thursday, were up 2 percent at 0757 GMT, outperforming a 0.4 percent firmer STOXX Europe 600 retail index.
Metro shares are down almost 26 percent this year, largely due to the company's exposure to Russia and a decision to delay a stock market listing of a stake in its Russian cash-and-carry operation due to market turmoil over the Ukraine crisis.
Metro had wanted to use the expected 1 billion euros in proceeds to invest in the fast-growing Russian business and other emerging markets and pay down debt.