RIL compensated Metro Rs 254 crore for the use of its trademark in India

20 Dec 2023 , 09:37 AM

After purchasing Metro AG’s wholesale chain in India a year ago, Reliance Industries paid the German retailer Rs 254 crore in the fiscal year that concluded in September 2023 for the right to use its brand name in India.

‘As part of the deal, Metro AG is giving the new owner some transitional services and licenses so they can run the company. A license payment of $28 million (Rs 254 crore) obtained in advance for the use of the Metro trademark is returned as part of the sale of Metro India.

Reliance Retail Ventures, a division of RIL, acquired Metro Cash & Carry India in December of last year for Rs 2,850 crore in cash. The complete real estate portfolio consisting of six store locations and all 31 wholesale stores were included in the acquisition. May 2023 marked the completion of the deal. The industry leader in wholesale and retail claimed that Metro India’s operations are no longer in line with its primary growth plan as a result of the fierce competition, rapid digitalization, and growing degree of market consolidation.

According to the article, Metro stated that the preliminary net cash inflow for the disposed assets and liabilities amounted to $0.3 billion (Rs 2,731 crore), taking into account the outgoing cash as well as the prepayment for using the Metro name.

‘However, positive Ebitda-effective earnings from disposal of its Indian business was $150 million (Rs 1,363 crore), including transaction costs,’ it stated.

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