German retailer Metro AG has agreed to transfer its wholesale operations in Vietnam to a Thai company under a plan to streamline the company's sprawling operations and improve profitability.

Thailand’s Berli Jucker will acquire the entire operations of Metro Cash & Carry Vietnam, consisting of 19 Metro stores across the Southeast Asian country, according to the 655 million euros (US$879 million) deal signed on Thursday.

Khuat Quang Hung, Metro Vietnam’s director of public relations, said all relevant legal procedures will be completed in the first half of next year.

Reuters quoted people familiar with the Vietnam transaction as saying that Metro had not actively sought a buyer but was approached separately by Berli Jucker and convenience store chain CP All.

"We strongly believe that the proposed transaction will create long-term shareholder value for both parties," Metro Chief Executive Olaf Koch said on Thursday.

The deal will boost Metro's earnings before interest and taxation (EBIT) in the 2014/15 fiscal year by about 400 million euros ($534.41 million).

The money will reportedly be used to expand Metro operations in India and China, according to sources familiar with the matter.

Metro, Europe's fourth-biggest retailer, inaugurated its first cash-and-carry store in Vietnam in 2002. The company now operates 19 stores countrywide with 3,600 employees, generating sales of 516 million euros in the 2012/13 fiscal year.

Berli Jucker is a major Thai import and export firm based in Bangkok with a market capitalization of 88 billion baht (roughly $2.8 billion).

The company has six representative offices in Southeast Asia, with 2013 revenue topping $1.3 billion.

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