METRO spin-off SATURN
METRO GROUP AG announced the separation Metro into a Wholesale & Food Specialist group and a Consumer Electronics group business. The two businesses would be strong-performing market leaders in their respective sectors with an expected combined market capitalisation of c.€8bn.
Metro is intending to spin-off its Wholesale & Foodservice businesses to create two independent listed entities both entities will be eligible for MDAX inclusion:
- Wholesale & Foodservice: Metro, Makro and Real
- Revenue: €38bn; EBITDA: €1.6bn; present in 35 countries
- Consumer Electronics: Media Markt, Saturn, Redcoon
- Revenue: €22bn; EBITDA: €0.7bn; present in 15 countries
Metro shareholders will receive shares in both entities according to their relative holdings.
The spin-off marks the next logical step in Metro’s transformation and is underpinned by compelling strategic rationale:
- Greater management focus and operational flexibility
- Clear investment thesis and greater visibility to investors, eroding the conglomerate discount
- Reduced complexity and competition for capital resources between the two businesses
- Distinct capital structures befitting their respective strategies
- Ability to pursue individual acquisition and partnership strategies
- Limited operational overlap and synergies between the two businesses
Rothschild provided independent advice and assistance to Metro on multiple aspects of the proposed transaction and will continue to advise Metro on the implementation of the demerger, with completion expected by Q2 2017.