Administrative control: Metro Cash and Carry to take over Makro in January

Deal has been finalised with Metro buying all Habib Group shares in Makro.

Farooq Baloch October 24, 2011


Metro Cash and Carry (MCC), which was long in merger talks with Makro-Habib, is going to take over all administrative operations of Makro from January to extend its financial arm into what, according to experts, is a market of over $42 billion a year.

Sources familiar with the matter confirmed that the deal between Germany-based MCC and Makro – one of the businesses owned by Mohammad Ali Habib family, has been finalised and will take effect from January next year.

Sources from MCC, who requested not to be named, said that MCC has bought all Habib Group shares of Makro. After the transaction, sources said, MCC will take over all Makro stores, including the three in Karachi.

With four stores in the country’s financial capital, sources added, MCC will make Karachi its southern region headquarter. They have planned to build the regional headquarter at MCC’s present location near Safari Park, confirmed another source.

The company will start training its employees from MCC’s platform after Eid-ul-Azha, the source said. The process of branding will also start after Eid while new recruits will be hired somewhere in December for Karachi-based locations.

Sources could not give financial details of the merger. However, a July 12 statement by Germany-based Metro Group – owner of MCC – said Thal Limited, the parent company of Makro-Habib, was going to own a majority stake in the company comprising substantially all the real estate of both Makro and MCC, while MCC will hold a major part of the operational business of both Makro and MCC.

A source from Makro also confirmed that they have been informed by the upper management about Makro being taken over by MCC.

MCC Pakistan’s Director Corporate Communications, Pervaiz Akhtar, however, did not confirm the news of the merger talks being finalised. “We are going through a regulatory process,” Akhtar said. “At this stage, it is too early to give any date for the merger.”

The two companies are said to have reported revenues of more than Rs30 billion in a year. MCC already has five stores in Pakistan with two of them located in Lahore and one each in Karachi, Islamabad and Faisalabad.

In October 2007, MCC launched its first wholesale store in Lahore. Within four years, it has been able to launch four more stores. This new acquisition will add five more stores taking the existing business to a total of 10 stores nationwide.

Pakistan’s retail and wholesale market is estimated at over $42 billion a year by the Small and Medium Enterprise Development Authority, which is serving a population approaching 180 million – thereby, attracting foreign retail chains like MCC and Carrefour and allowing local retail markets such as Imtiaz to expand.

With its 700 stores and more than 100,000 employees in 30 countries around the world, MCC already enjoys top position in wholesale sector across Europe, recording €31 billion sales in 2010.

Published in The Express Tribune, October 25th, 2011.


khurram | 11 years ago | Reply

this is the pure example of liberalized market. Multinational Coperation comes into a country on the way of FDI and purchase or merger different SMEs and then control or monolpize the market.

Danish | 11 years ago | Reply

Hope MCC will implement Macro's 'Mikro' strategy in small cities/towns. In a populous country like Pakistan, consumer goods business is inherently everlasting. WIth a 10-30% margin, a healthy return is intrinsic quality of investment in this sector.

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