October 11, 2019 / 11:17 AM / 3 months ago

UPDATE 1-Metro confirms Wumart in talks to buy China business

* Metro in talks with Wumart about China stake sale

* Metro to strike alliance with Wumart in China

* Metro to retain 20% stake in China venture (Adds confirmation from the company)

HONG KONG/DUESSELDORF, Germany, Oct 11 (Reuters) - German retailer Metro on Friday said it was in advanced talks with China's Wumart about a partnership regarding Metro's China operations, sending Metro's shares up 2% after the company confirmed an earlier Reuters report.

"This partnership would include the sale of Metro's entire indirect participation in Metro China to a subsidiary of Wumei for an enterprise value of 1.9 billion euros ($2.10 billion)," Metro said in a statement on Friday.

Metro would retain a 20% stake in Metro Wumart China joint venture going forward, the German retailer said, adding that completion of the potential transaction would be subject to approval by regulatory authorities.

Earlier on Friday Reuters reported that China's Wumart Stores emerged as the front runner to clinch a majority stake in German retail giant Metro's China business, citing sources familiar with the auction.

The German wholesaler is selling a majority stake in its China operations, which include 95 stores and real estate assets in major cities such as Beijing and Shanghai, in a deal that would value the business at between $1.5 billion and $2 billion.

The sale move is part of a global reorganisation of the wholesaler and comes as China's wholesale and retail sectors are experiencing disruption from e-commerce players. ($1 = 0.9060 euros) (Reporting by Matthias Inverardi in Duesseldorf, Julie Zhu in Hong Kong and Arno Schuetze in Frankfurt Writing by Edward Taylor Editing by Michelle Martin)

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