BERLIN (Reuters) - German retailer Metro AG
"We expect a listing to enable us to expand our business in an even more dynamic way and to strengthen the balance sheet of Metro Group at the same time," Chief Executive Olaf Koch said in a statement on Monday.
Metro said its supervisory board had given its approval last Friday for the company to proceed with the IPO preparations, which it said were subject to market conditions.
Metro, Europe's fourth-biggest retailer which runs cash and carries, supermarkets, department stores and the continent's biggest consumer electronics chain, has been restructuring its portfolio to cut debt and raise money to invest in its core businesses, which include cash and carries.
Metro's shares, which jumped in November when Reuters first reported the company was considering a Russian IPO, rose on the news, to trade up 1.5 percent by 1100 GMT, outperforming a 0.2 percent firmer European retail index <.SXRP>.
Metro has more than 700 cash and carries in 29 countries and the business accounts for almost half of group sales.
It entered Russia in 2001, with the country becoming its most profitable unit and Metro's third-biggest market for its cash and carry business, behind Germany and France, with sales of 4.1 billion euros (3.4 billion pounds) in 2012.
Analysts value the Russian business at 4-7.5 billion euros, translating into potential proceeds of at least 1 billion euros from the share sale for Metro.
Sources close to the matter have told Reuters that the flotation is likely to be run by Sberbank
Russia's $2 trillion economy is struggling with slowing growth as weak investment, a shrinking workforce and ageing Soviet-era infrastructure all act as a drag, although consumer spending is still buoyant.
Metro is Russia's fourth biggest retailer behind X5
($1 = 0.7376 euros)
(Reporting by Emma Thomasson; Editing by Ludwig Burger and Mark Potter)