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Alibaba in talks to buy stake in German wholesaler's China outlets: Report

Alibaba's interest comes after rival Tencent last year signed a partnership deal with France's Carrefour

Reuters  |  Hong Kong/Duesseldorf 

The logo of Alibaba Group is seen at the company's headquarters in Hangzhou, Zhejiang province, China
The logo of Alibaba Group is seen at the company's headquarters in Hangzhou, Zhejiang province, China

Chinese is in talks with Germany's about taking a stake in the German wholesaler's operations, three sources told on Thursday.

and Alibaba declined to comment.

The talks are at an early stage and could still fall apart, the sources said.

Alibaba's interest comes after rival last year signed a partnership deal with France's

U.S.-listed Alibaba, which runs Taobao and TMall and delivery app, is looking to develop a business-focused retail strategy, said one of the sources. Teaming up with a like could also bring synergy to its fresh produce units Hema and Yiguo, the source added.

Any deal would add to the HK$22.4 billion ($2.87 billion) Alibaba spent in 2017 on a major stake in China's top hypermart operator, Sun Art Retail Group Ltd, as part of a push to build big-data capabilities in the

For its part, Metro was once a sprawling but has been restructuring in recent years to focus on its core cash-and-carry business, selling Kaufhof department stores and then splitting from group

It is also trying to offload its loss-making Real hypermarkets chain, saying on Tuesday that the sale is progressing.

Metro shares, which have gained 16 percent this year on speculation of a possible bid for the company and on divestments, were up 0.6 percent after the report.

"Initial excitement about a bid premium will soon be replaced by worries about hollowing out the business and removing one of the few paths for sustainable growth," said Bernstein

Metro has 95 stores in and in major centres, such as and Shanghai, one of the sources said.

Apart from Alibaba, there are other parties involved in early discussions with Metro, according to the sources, with an official sale process expected to kick off soon.

said on Tuesday that the German firm was reviewing potential partnerships with local players in

Metro and Alibaba have already partnered in in China.

"We are growing continually and we are profitable there," Koch said when Metro presented first quarter earnings.

Metro reported that same store sales in rose a currency adjusted 7 percent to 1.04 billion euros ($1.17 billion) in the October to December quarter.

The possible China move comes as Czech investor is preparing a potential bid for Metro, people close to the matter told last month.

Global Commerce (EPGC), a vehicle co-owned by Kretinsky and Slovak investor Patrik Tkac, is expected to have the financing and other arrangements in place to be able to announce a tender offer for Metro as early as March, the people added.

($1 = 0.8853 euros)


(Reporting by in Hong Kong and in Duesseldorf, Germany; Additional reporting by Doug Busvine in Frankfurt; Editing by and Christopher Cushing)

First Published: Fri, February 15 2019. 08:55 IST