The deal, part of a wider plan by Coin to expand and increase market share, will give Coin a controling stake in 99 Kaufhalle retail outlets and tworegional distribution centers from early 2001. Metro unit Divaco had been unable to make the Kaufhalle stores profitable.
Coin says Metro, Europe's second largest retailer, will retain Kaufhalle's debt. "Coin's board of directors is very satisfied with this move because itprojects us into international markets," says Coin Chairman Vittorio Coin.
The company says turnaround plans for the new company -- including marketing and advertising -- are not yet finalized. However, it has decided that the new stores would become part of the Oviesse brand, which Coin controls.
The shift will cost Venice-based Coin an estimated $145 million over three years, the company predicts. The money paid by Metro will help offset some ofthat cost.
Copyright September 2000, Crain Communications Inc.