In a significant financial transaction, Reliance Industries has paid ₹254 crore to METRO AG, a German multinational company, for using its brand name in India until September 2023. This payment is part of the licensing agreement following Reliance’s acquisition of METRO AG’s wholesale chain in India last year in a ₹2,850 crore deal.
METRO AG, in its annual report, stated, “METRO AG is providing certain transitional services and licenses as part of the transaction to enable the new owner to operate the business.” The license payment of €28 million (approximately ₹254 crore) received in advance for using the METRO brand is recognized in the financial year.
The acquisition, completed on May 11, 2023, included all 31 wholesale stores and the entire real estate portfolio, marking a significant move for Reliance Industries. The licensing agreement and payment highlight the strategic importance of brand association in the competitive Indian market.
The report further emphasizes that METRO India’s business no longer aligns with METRO’s core growth strategy due to market consolidation, digitalization, and intense competition. The financial details reveal a net cash inflow of €0.3 billion (₹2,731 crore) after considering outgoing cash and the prepayment for brand usage.
Reliance Industries Chairman and Managing Director, Mukesh Ambani, continues to make strategic moves in the business landscape, solidifying the company’s presence in diverse sectors. This payment underscores the value placed on brand recognition in Reliance’s business strategy.
