BERLIN (AP) — German retail and wholesale group Metro AG is selling its department store business in Germany and Belgium to Canadian retailer Hudson's Bay Company in a deal worth just over 2.8 billion euros (around $3.2 billion).
The deal includes the Galeria Kaufhof chain in Germany and Galeria Inno in neighboring Belgium, along with the business's real-estate portfolio, the two companies said Monday. HBC will take over 103 Galeria Kaufhof stores in Germany, 16 Sportarena stores and 16 Galeria Inno stores in Belgium.
Metro said it expects to reduce its net debt by 2.7 billion euros thanks to the transaction and foresees a roughly 700 million-euro boost to pre-tax earnings. The total transaction value of 2.825 billion euros includes "the assumption of certain liabilities," the companies said.
The German and Belgian chains will continue to operate under their current brand names and "no significant changes" to branches or staffing are expected, they said. Galeria Kaufhof will continue to have its headquarters in Cologne and its current management is expected to remain in place.
The deal is expected to close by the end of September.