This would be the second deal in the sector this year, following the sale of the last four Real hypermarkets by Metro to a group of people in the business.
Grocery retail, a EUR17 billion to EUR18 billion market, has become the stage of a number of deals over the past few years, some of them worth more than EUR100 million even. The most important move by far was the takeover of the Profi supermarket chain by buyout investor Mid Europa Partners for EUR533 million at the end of 2016. The seller was private equity firm Enterprise Investors. This was not only the biggest deal conducted by a private equity fund on the Romanian market, but also the biggest in local retail.
Second most important move in the retail sector was the takeover of 20 Real hypermarteks by rival Auchan in a more than EUR250 million deal and the acquisition of the Plus Discount retailer by Lidl in an about EUR200 million agreement.
The XXL Mega Discount stores were closed at the end of 2016, with six of them set to be converted into Penny Market, Rewe’s most important brand in Romania and the other two sold. Rewe decided to close them because they did not perform as expected. The German retailer had previously tried to sell the stores but failed to reach an agreement on the price with the bidders.
The local grocery retail market was one of the most crowded in the economy up until the boom years 2006-2008, with 15 international chains and 100,000 small retailers competing. Today, only ten foreign retailers are left, as well as about 70,000 small entrepreneurs.
Analysts and executives on the market have repeatedly said the market was too crowded, considering its size, purchasing power and population. So the big fish ate the small fish, like Carrefour did with Billa, whose local operations it acquired at the end of 2015. The local networks created by entrepreneurs were acquired, too. The local grocery retail has seen more than 20 deals in the past decade, ZF has found. The ten most important such moves stood at more than EUR1 billion, ZF has calculated.
(English version by Loredana Fratila-Cristescu)