METRO GROUP’s planned demerger into two independent and stock-listed retail companies underway

Düsseldorf, 2016-Sep-06 — /EPR Retail News/ —  After the successful completion of the analysis phase, the planned demerger of METRO GROUP into two independent, strong and stock-listed retail companies is taking concrete shape: the necessary details with regard to corporate law, tax law and the respective capital structure of the two entities were clarified. Today (5 September 2016), the Management Board of METRO AG, after completion of the reviews, has decided to start with the preparations required for a demerger of METRO GROUP. The Supervisory Board approved the plans on the occasion of an extraordinary meeting held on Monday. Effective from 30 September, the group will be split into two organizationally separate entities on a pro-forma basis.

“In the past months we have intensively analysed the planned split of our group into two strong and focused trading companies”, said Olaf Koch, Chairman of the Management Board of METRO AG. “Now, we are creating the first important prerequisites and will implement the according actions. With the organisational separation, we are taking the first major step towards creating a leading international Wholesale and Food Specialist as well as the European market leader for Consumer Electronics products and services. The developments of the past few months have confirmed our belief that these two entities with hardly any operational overlaps and synergies will be even more successful when operating independently”.

Technically, the group split is achieved by spinning off and separate the Wholesale and Food business (METRO Cash & Carry and Real) as well as other related entities and business activities such as logistics, IT and real estate. The remaining group activities will essentially comprise the roughly 78% majority shareholding in Media-Saturn as well as other affiliated companies.

At the same time, the following key personnel decisions for both new entities are intended: Jürgen B. Steinemann is to retain his mandate as Chairman of the Supervisory Board of METRO AG for the future Wholesale and Food Specialist Group and Jürgen Fitschen, member of the Supervisory Board of METRO AG since 2008, is to assume the office of Chairman of the Supervisory Board of the future Consumer Electronics company. For the positions of Management Board of the Wholesale and Food Group following proposals have been made:

· Chief Executive Officer (CEO): Olaf Koch, as already communicated
· Chief Financial Officer (CFO): Christian Baier, currently CFO METRO Cash & Carry
· Chief Operating Officer (COO): Pieter Boone, currently Member of the Management Board of METRO AG, responsible for METRO Cash & Carry
· Chief Human Resources Officer (CHRO): Heiko Hutmacher; currently Member of the Management Board and CHRO of METRO AG

Following proposals have been made for the Management Board of the Consumer Electronics unit:

· Chief Executive Officer (CEO): Pieter Haas, as already communicated
· Chief Financial Officer (CFO): Mark Frese; currently Member of the Management Board and CFO of METRO AG
· Chief Legal and Compliance Officer (CLCO): Dieter Haag Molkenteller, currently Group Director Legal Affairs & Compliance METRO AG

All Management Board positions have to be approved by the respective Supervisory Boards, the actual confirmation is under the usual reserve of the annual general meeting or relevant supervisory board.

In parallel, METRO GROUP defined the business strategies for the two future entities and also developed clear capital and tax structures for them. The demerger concept was already aligned with the tax authorities. It is expected, that both groups will maintain the “investment grade” rating. An increase in the capital stock of METRO AG is not planned. To strengthen the capital base of the Consumer Electronics company, a 10% shareholding in the Wholesale and Food business is envisaged. In the same way, almost all existing financial liabilities of the group are to be assumed by the Wholesale and Food company. “The new capital structure will give both entities the necessary stability and scope for further growth. Both companies will be endowed with sufficient liquidity”, said Olaf Koch.

In late March 2016, the Management Board of METRO AG had announced that it would examine a split of the group into a Wholesale and Food Specialist company and a company focused on Consumer Electronics products and services as the logical next step in the transformation of the group. Both companies are to be managed as separately listed stock corporations with their own distinct profile, management and Supervisory Boards. The underlying conviction is that, by focusing on their respective industry and customer segment, both companies will be able to develop larger growth perspectives. Both companies stay based in Düsseldorf.

METRO GROUP is one of the most important international retailing companies. It generated sales of some €59 billion in financial year 2014/15. The company operates over 2,000 locations in 29 countries and employs more than 220,000 people. The performance of METRO GROUP is based on the strength of its sales brands, which act independently on the market: METRO/MAKRO, the international leader in the self-service wholesale trade; Media Markt and Saturn, the European market leader in consumer electronics retailing; and Real hypermarkets.

For more information, visit www.metrogroup.de

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METRO AG
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Source: Metro Group

METRO AG prepares demerger into two independent and sector focused companies: Wholesale and Food Specialist group, and Consumer Electronics group

  • Creation of two independent, stock-listed companies as market leaders in their respective sectors
  • Separation of METRO GROUP into a Wholesale and Food Specialist group, and a Consumer Electronics group
  • Both companies with improved focus, quicker decision making processes, more flexibility and improved operational efficiency
  • CEO Koch: “The creation of two independent companies would be the logical next step in the transformation of our business towards more growth, customer centricity and entrepreneurship.”
  • Aimed for completion until mid-2017

Düsseldorf, Germany, 2016-Apr-02 — /EPR Retail News/ — The Management Board of METRO AG is preparing the creation of two independent and sector focused companies through a demerger of the group: A Wholesale and Food Specialist group, as well as a Consumer Electronics products and services group. Both entities would become individually stock-listed, with their own distinct profile, Management and Supervisory Boards. The aim would be to give each of the companies and their respective management full control over their corporate strategies. This will further increase customer focus, accelerate growth of the businesses, simplify structures and improve time-to-market and operational excellence. Moreover, both entities would be able to independently pursue acquisition and partnership strategies, enabling them to define their own expansion strategies.

Management and Supervisory Boards will make a decision on the contemplated demerger of METRO GROUP after a period of intensive consultation and review. Should ongoing assessments prove to be positive and the shareholders vote in favor, the implementation of the demerger is aimed for mid-2017.

“Over the past years, we have successfully revitalized our core businesses while significantly strengthening our group balance sheet,” said Olaf Koch, CEO of METRO AG. “Both our Wholesale and Food Specialist business as well as our Consumer Electronics business have continued to commercially improve, are on a steady successful path and are best-equipped for an independent future. Our shareholders would effectively own two well positioned market leaders, both of whom are increasingly focusing on their respective business areas and are generating more value for customers, employees and business partners.”

The demerger would see METRO AG separated into two independent businesses: A Wholesale and Food Specialist group (comprising METRO, MAKRO and their associated entities as well as Real) and a Consumer Electronics products and services group (comprising Media-Saturn and its portfolio of strong formats and brands). The two businesses currently have very limited operational overlap and very limited synergies.

Subject to the approval of the respective Supervisory Boards, it is intended that the Wholesale and Food Specialist entity would be run by Olaf Koch, currently CEO of METRO AG, while the Consumer Electronics group would be headed by Pieter Haas, currently member of the Management Board of METRO AG and CEO of Media-Saturn. Other board positions have yet to be decided. The implementation of the demerger is targeted by mid-2017, subject to customary approvals. METRO AG’s anchor shareholders Haniel, Schmidt-Ruthenbeck and Beisheim support the intention of METRO AG’s Management Board for a demerger into two independent companies.

Jürgen Steinemann, Chairman of the Supervisory Board of METRO AG, said: “I feel very strongly that a split into two independent and focused businesses would be in the best interest of all stakeholders, as it would facilitate a significant opportunity for faster and more profitable growth. Having discussed it in great depth, I fully support the initial results of the review conducted by the Management Board.”

The demerger would be executed through a spin-off of METRO Cash and Carry, Real and other related businesses and services companies from current METRO AG, which would subsequently fully focus on the consumer electronics sector under a new company name. This would enable both entities to strengthen their focus on the initiated transformation and innovation programs, while pursuing corporate development into significantly broadened spheres. It would also make the distribution and utilization of investment capital in both of the new entities clearer.

It is envisaged that METRO AG shareholders would receive shares in both companies in proportion with their existing holdings. Following final decisions by the Management Board and the Supervisory Board, shareholders would be invited to a General Meeting in order to discuss and vote on the proposed demerger. An analysis of current company structure, governance, growth opportunities, legal and tax consequences and financial aspects has shown that, from a shareholder perspective, the proposed demerger would be commercially beneficial.

The creation of two independent organizations has been made possible by the successful transformation of METRO GROUP and its business segments over the past few years. METRO Cash & Carry has delivered ten consecutive quarters of like-for-like growth and improving earnings, despite a challenging environment. Media-Saturn has achieved six consecutive quarters of like-for-like growth, an all-time high market share and strong earnings in the last fiscal year. Both businesses now have strong financial profiles and significant growth as well as value potential. Recent successes have been achieved through a strong customer focus and continued efforts to tailor the business models to local requirements. With the sale of GALERIA Kaufhof in 2015 and various other changes in the portfolio such as the sale of METRO Cash & Carry Vietnam and Real International over the past years, focus on METRO AG’s core businesses has been enhanced, and the group’s balance sheet strengthened, preparing the grounds for such a change.

METRO GROUP will hold a press conference today at 12:30 p.m. at the “Melia” Hotel in Düsseldorf (Inselstraße 2, 40479 Düsseldorf). It will also be broadcasted live.

METRO GROUP is one of the most important international retailing companies. It generated sales of some €59 billion in financial year 2014/15. The company operates over 2,000 locations in 29 countries and employs more than 220,000 people. The performance of METRO GROUP is based on the strength of its sales brands, which act independently on the market: METRO/MAKRO Cash & Carry, the international leader in the self-service wholesale trade; Media Markt and Saturn, the European market leader in consumer electronics retailing; and Real hypermarkets.

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E-Mail METRO GROUP: presse@metro.de