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Pushing forwards in its strategy for Central and Eastern Europe, French retailer Groupe Auchan signed off on a deal to buy over 100 outlets of Real across the region from German peer Metro for a reported €1.1bn.

The sale includes Real's operations and real estate assets in Poland, Romania, Russia and Ukraine, Metro said in a statement on November 30. The German group will receive €600m in cash, with the remainder comprising lease liabilities from which the retailer will be freed. The deal, which still needs regulatory approval from the national antitrust regulators, should be closed in 2013, it added.

Metro has been looking to offload Real, as well as department store chain Kaufhof, for some time in order to help reduce its debt load and to let it to focus on its core cash-and-carry and consumer electronics stores. It sees better long-term growth prospects for those core activities in emerging markets, the group said in a statement.

The German company's net debt that is relevant to its ratings will be reduced by €1.5bn following the transaction. Balance sheet net debt stood at €7.7bn at the end of September, according to Reuters.

The deal leaves the Turkish operation as Real's only chain of grocery stores outside Germany. Those outlets were not included in the package because Auchan is not present in the country and only wants to strengthen its existing activities, the Metro press release says. Despite insisting later, according to Bloomberg, that there are no plans to sell it at the moment, Metro CEO Olaf Koch gave the Turkish operation the big sell in the press statement. "The business activities of Real in Turkey have developed very nicely in recent years and show great growth potential," he claimed.

For Auchan, the deal sees it take an even greater foothold in developing markets in which the opportunity for new entrants is becoming ever more limited. While the likes of Metro unload assets due to crisis-led struggles in their Eurozone home markets, the French company is betting heavily on growth potential in CEE. The 91 hypermarkets it's buying in Poland, Russia, Romania and Ukraine will add to its current offer of 98 outlets in those countries. The region accounted for sales of €2.6bn for Real last year.

Auchan's chairman, Vianney Mulliez, said in the statement that Western Europe, Eastern Europe and Asia remain priority development zones. The French group has proved more adept than many in operating in CEE. In particular, it has battled its way into a strong position into the largest prize of all.

The Russian market, offering huge potential but an extremely challenging environment, is dominated by domestic players. Until now, Auchan and Metro were the only foreign grocers to feature in the country's top five. The deal will increase Auchan's market share, while Metro drops out of the upper rankings.

The success of the French retailer, driven by early entry, is only illustrated more sharply by compatriot Carrefour, whose Russian adventure lasted no more than four months before it was forced to sell off its two stores by renewed pressure from the ongoing crisis in 2009.

These days, foreign players wanting to grab a piece of CEE's biggest market by far are faced with a high-priced acquisition as their only potential means of entering the country these days. Walmart, for instance, has been sniffing around for an entry point for several years, but has baulked at the high valuations of the likes of X5 and Magnit.