Wal-Mart has emerged as favourite to buy German retail group Metro. Hans-Joachim Körber, chief executive of Metro, tried to play down the rumours this week. He told shareholders at the company's agm that it has had no concrete discussions with Wal-Mart. But he evaded questions about the future of Real ­ which Tesco was interested in acquiring. And trade sources insist that Wal-Mart is interested in going further and buying the whole Metro group ­ rather than bits of it. Analysts say they would be surprised if Metro's controlling families would agree to such a deal. Although they would be happy to get rid of Metro's troubled Real chain for the right price, they would be loathe to sell its profitable Makro cash and carry chain. But such a deal ­ which could be worth as much as £12.4bn ­ would make strategic sense for Wal-Mart. First, it would get much needed critical mass in Germany, where it is expected to lose up to DM250m this year. Second, it could quickly sell off unwanted divisions ­ such as the Praktiker DIY group and the MediaMarkt and Saturn electrical chains. Finally, Wal-Mart would be able to convert Makro depots over to its Sam's Club format. Reports from Germany suggest Wal-Mart's auditors, Shearman & Sterling, are already examining the books at Metro's Düsseldorf HQ. And even if Wal-Mart decided to bid for just Real and the Extra supermarket chain, it could easily outbid Tesco and would at a stroke increase its business in Germany by a factor of five. One analyst commented: "There is no prospect of organic growth for Wal-Mart in Germany so they either have to get out or do something massive." One downside is that it could take up to three years to improve the performance of Real at a time when competition in Germany is intensifying. That's one reason why some analysts believe Carrefour has not ­ as yet ­ joined the bidding. But the pressure to do a deal quickly has intensified. Metro's share price has shot up by as much as 20% since The Grocer revealed it was in talks with Tesco. {{NEWS }}