German retail and distribution giant Metro said Monday it has agreed to sell its Kaufhof department store chain to Canadian group Hudson's Bay for 2.825 billion euros ($3.2 billion).
"Today, Metro signed an agreement with Hudson's Bay Company to sell Galeria Kaufhof which includes the operational department store business both in Germany (Galeria Kaufhof) and Belgium (Galeria Inno) as well as the corresponding real estate portfolio," the German company said in a statement.
"The purchase price is 2.825 billion euros. With this transaction Metro expects a positive cash inflow of around 1.6 billion euros and to significantly reduce its net debt by around 2.7 billion euros," the statement said.
In addition, Metro said it expected a positive effect on operating profit "in the region of around 700 million euros from the transaction," which is targeted for completion by the end of September, it added.