Veropoulos-Metro supermarket deal to start sector concentration

It is now up to creditor banks whether the preliminary deal between supermarket chains Veropoulos and Metro for the latter’s takeover of the former goes ahead, as talks between the two companies and the evaluation of Veropoulos’s assets are close to completion. The aim is to have the deal sealed by year-end to contain the losses of Veropoulos and its creditors. If the deal goes through, it will lead the way for the sector’s concentration.

The economy’s backtracking in 2015 has changed the features of the concentration process in the Greek supermarket sector. While in 2014 it was dominated by the acquisition of small and medium-sized regional chains by the market’s big players in an effort to expand their nationwide network, the landscape has changed radically this year.

The yearly 1.9 percent decline in turnover in the first eight months of 2015, which was far greater than that recorded a year earlier, and the major credit exposure that big supermarket chains have to banks and suppliers are now leading to mergers and acquisitions among the top players.

People involved in the negotiations between Veropoulos and Metro say that only some details remain before the deal is complete.

At the same time, Veropoulos’s assets and obligations have been evaluated by PricewaterhouseCoopers and Metro is now preparing to start negotiations with the banks.

Metro is not planning to propose a debt haircut but rather an improvement in Veropoulos’s borrowing terms so that it is not only saved from bankruptcy but will also have growth prospects.

Marinopoulos, Greece’s biggest supermarket chain in terms of branch network, is scrambling to reduce its own debts and restore normal product supplies. Its efforts for a cash injection via a loan have not borne fruit, but suppliers are reluctant to resort to more radical solutions such as forcing the confiscation of assets, which could have more negative consequences.

Strong rumors of a confiscation move against Marinopoulos by a major Greek food company have not been confirmed. The food company is now understood to be processing a restructuring plan with a well-known auditing firm.