BERLIN (Reuters) - Shareholders in Metro MEOG.DE voted on Monday in favour of a plan to split the German retailer into two companies, one a wholesale and hypermarket food business, and the other Europe’s biggest consumer electronics group.
Metro, a sprawling conglomerate with 2,000 stores in 29 countries, has been restructuring in recent years to focus on cash-and-carry and consumer electronics, selling its Kaufhof department stores and Real supermarkets in eastern Europe.
It said in a statement on Monday that 99.95 percent of the voting share capital represented voted in favour of the split.
Metro hopes the split will help the independent companies pursue more acquisitions and trigger a revaluation of the stock as Metro currently trades at a discount to other pure wholesale retailers such as Sysco (SYY.N) and Britain’s Booker (BOK.L).
Metro last week reported slightly lower than expected profit in the critical Christmas quarter, hurt by the performance of its cash and carry and hypermarket businesses.
Metro plans to spin off and separately list the food business by the middle of the year, with that group retaining the Metro name while the Media-Saturn consumer electronics business will be renamed Ceconomy.
“We will be more open for partnerships and maybe also for acquisitions and mergers,” Chief Executive Olaf Koch told the annual shareholders meeting.
While the attractiveness of the wholesale business has been underlined by Tesco’s (TSCO.L) offer to buy Booker, the consumer electronics sector is also seen as ripe for mergers as fierce competition from the likes of Amazon (AMZN.O) squeezes margins.
Media-Saturn, which runs more than 1,000 stores in 15 countries in Europe, has long been seen as a candidate to merge with its closest rival in the region, Britain’s Dixons Carphone (DC.L), and overtake Best Buy (BBY.N) as the world’s leading consumer electronics chain.
Reporting by Emma Thomasson and Victoria Bryan; editing by David Clarke