Metro surges as it announces plan to split in two

Shares in Metro AG surged on Wednesday after the German retailer said it was planning to split into two independent and sector-focused companies through a demerger of the group.

Metro said it would create a wholesale and food specialist group and a consumer electronics products and services group. Both entities would be individually stock listed with their own distinct profile, management and supervisory boards.

The retailer said giving each company’s management full control over corporate strategies would further increase customer focus, accelerate growth of the businesses, simplify structures and improve time-to-market and operational excellence.

In addition, the demerger – the implementation of which is expected in mid-2017 – would mean both entities would be able to independently pursue acquisition and partnership strategies.

Chief executive officer Olaf Koch said: “Both our Wholesale and Food Specialist business as well as our Consumer Electronics business have continued to commercially improve, are on a steady successful path and are best-equipped for an independent future.

“Our shareholders would effectively own two well positioned market leaders, both of whom are increasingly focusing on their respective business areas and are generating more value for customers, employees and business partners."

The demerger would be executed through a spin-off of Metro Cash and Carry, Real and other related businesses and services companies from current Metro AG, which would subsequently fully focus on the consumer electronics sector under a new company name.

At 0906 GMT, Metro shares were up 7.1% to €26.32.