The German retailer METRO sold its China business, and the pick-up was made by local retailer Wumei Group.

On the evening of October 11, Metro Group, Wumart Group and Dodge Dmall jointly announced that Wumart had signed a definitive agreement with Metro Group for the acquisition of Metro China. After the transaction is completed, Wumart Group will hold 80% of the shares in the joint venture established by the two parties, and Metro will continue to hold 20% of the shares.

Wumart did not disclose the specific amount of the transaction. However, Metro said in a statement on Friday that it would sell all its indirect participation shares in China to a subsidiary of Wumart for a value of 1.9 billion euros (2.1 billion US dollars), which will be retained in the future. It has a 20% stake in the METRO China joint venture.

The two parties agreed that Metro China will continue to operate independently under the “Metro” brand, and the new joint venture headquarters will remain in the current Putuo District of Shanghai. The new joint venture will maintain the current store size and all commercial operations, while continuing to implement the planned new store development.

Metro China CEO Claude Sarrailh said that Wumart Group and multi-point Dmall will accelerate our new retail transformation and ensure that Metro continues to expand its business in the fast-changing and highly competitive Chinese market. More is a technology company founded by Zhang Wenzhong, founder of Wumei Group, to empower retail companies.

Metro is a 55-year-old European veteran retailer. It entered China in 1996 and currently has 97 stores in 58 cities in China, 44 of which are located in East China. Since September 2018, the news that Metro will sell a minority stake has been heard.

In May of this year, Reuters disclosed that at least eight bidders were preparing to participate in the second round of the majority stake in Metro China. The entire bidding process is likely to end in September, with the exception of Wumart Group. Beyond the figure, there are different bidding consortiums such as Tencent and Yonghui, Wal-Mart, Alibaba and RT-Mart.

Wumei Supermarket has made frequent mergers and acquisitions in recent years. In 2018, Wumart took over the Lotte Group’s 22 Lotte Mart stores in North China at a price of 1.5 billion yuan. In 2014, Wumei Group acquired a 70% stake in China Buanju for 1.4 billion yuan. The latter has nearly 40 furniture chain stores in China.

According to the “2018 China Top 100 Chains” list released by the China Chain Store & Franchise Association, Wumei ranked 11th with sales of 4.8 billion yuan.

In the fiscal year ending September 2018, Metro’s sales in China were approximately 20.9 billion yuan, compared with 21.3 billion in the previous fiscal year.

In addition to expanding the size of Wumart Group through acquisition, Wumei may hope to enter the current member-owned warehouse store through Metro.