Metro International S.A. today announced that it has entered into an agreement to sell the shares in its South Korean operations to two of its partners in the operation. As a part of this transaction, Metro has entered into a franchise agreement which entitles Metro to franchise fees based on a percentage on Metro Korea’s sales.
The acquisition price for Metro’s 29.99 percent participation in Metro Korea is €4.9 million. Due to South Korean capital gains tax, Metro will receive a net amount of €4.4 million. The net amount will be paid in two instalments; the first one of €4.2 million on the transaction day which is today and the second one of €0.2 million in twelve months.
The shares in Metro Korea had a book value of €5.0 million on 30 September 2010 following the write down of €1.1 million based on price indication. Thus, Metro will incur in Q4 a loss of €0.6 million.
Per Mikael Jensen, President and CEO of Metro International, commented: ”Metro Korea has a daily readership of 700 000 and has shown stable performance since the launch in 2002. I look forward to continuing the cooperation with our partners in Metro Korea on a franchise basis and to develop the Metro brand in Korea. The payment of €4.4 million for Metro’s stake is equivalent to more than 40 times the dividends which Metro received in 2009, and will free up resources for Metro to invest in emerging markets.”