Shareholders of Metro AG on Monday approved the demerger of Metro Group into two companies.
The approval came following a vote by shareholders at the firm’s annual general meeting. According to the Düsseldorf-based firm, 99.95 percent of the shareholders eligible to vote approved of the demerger. Metro said, “The demerger will enable both companies to become faster, more focused and more agile in order to create even greater value for customers.”
The company on Dec. 13 had already approved of the spin off into two independent companies, but had already separated the operations in September in preparation for the demerger. Monday’s shareholder vote was required to complete the transaction. The wholesale and food hypermarkets — which include its Metro Cash and Carry business — will continue to operate under the Metro brand, while the consumer electronics business will operate under the Ceconomy brand.
Related Articles
Shareholders will keep their existing Metro AG shares, which will be renamed Ceconomy. They will also be issued one new Metro AG share for each ordinary share they currently own. The demerger and listing of the shares of the future Metro AG are expected to be completed by mid-2017.
You May Also Like
“Our wholesale and food specialist Metro is a leading global player — and provides a strong base to expand its store-based and delivery business across all 35 countries in which it operates,” said Olaf Koch, chairman of the management board of Metro AG.
Koch will continue to head up Metro AG.
In an interview with WWD last month, Koch said Metro’s customers “have a predictable, repeat purchasing behavior.” He described their carts as having a “high average spend.”
At one point earlier in its existence, the hypermarket sold apparel in its stores. Koch said there’s “strong demand” for apparel, and would consider bringing the category back as “concessions” in the hypermarkets. He said the first order of business was to complete the separation transaction, and then make sure the business is operating the way it should before testing new categories.
As for the operating structure, Koch said the head of each country where Metro has stores is essentially the chief executive officer of that operation. He likened the arrangement as handing the country “ceos” the keys to the business, noting that the structure was required to empower them so “they can grow market share.” Store managers also get incentivized through participation in a “10 percent” equity plan for their store, Koch said.
Metro has 63 million active Metro cards. It has more than 752 warehouses across 25 countries. Most stores are across Western Europe, but there’s opportunity for growth in Eastern Europe and in Asia, Koch said.
Hypermarkets are comparable to the warehouse clubs in the U.S., but the key difference is that the U.S. warehouse club is business-to-consumer, while Metro is focused on the business-to-business entrepreneur.