Reliance Retail Ventures Ltd (RRVL), a subsidiary of the oil-to-telecom conglomerate, has signed definitive agreements to acquire a 100% equity stake in Metro Cash & Carry India Pvt Ltd for a total cash consideration of Rs 2,850 crore, as the conglomerate led by billionaire Mukesh Ambani seeks to consolidate its dominance in India’s massive retail sector.

With over 16,600 outlets, RIL is the country’s largest brick-and-mortar retailer, and a strong wholesale segment would strengthen its operations in India.

Metro began operations in India in 2003 as the first company to establish a cash-and-carry business style in the country, and it now has 31 large size stores across 21 cities, employing around 3,500 people.

Fruits and vegetables, general foodstuff, electronics, household goods, and apparel are sold to commercial customers such as hotels and restaurants, as well as offices and companies, small shops.

Half of the stores are in the southern region of the country.

Reliance would get access to a huge base of registered kiranas and other institutional clients, as well as a robust supplier network, as a result of the acquisition.

Its retail division operates three distinct business models: B2C via physical stores, internet businesses (including Jio Mart and Ajio), and a B2B business. It is the largest organized retailer in the groceries, fashion and lifestyle, and consumer electronics divisions.

The transaction will result in a transaction gain of around 150 million euros for Metro, and increased earnings per share are expected, according to the business.

Metro India’s equity value of about 0.3 billion euros suggests a 0.6x EV/sales multiple based on fiscal year 2021-22 sales and taking lease rental and other related liabilities of 150 million euros into account.