DUESSELDORF, Germany (Reuters) - German billionaire Otto Beisheim, one of the founders of retail group Metro , committed suicide after being diagnosed with an incurable illness.

Beisheim, 89, had lost hope after his diagnosis and was found dead at his home near the Tegernsee lake in Bavaria on Monday morning, his company said.

He had helped introduce to Germany in the 1960s the concept of "cash and carry", warehouse-type shops where trade customers such as hotels and restaurants go to buy products in bulk.

The Metro group, now the world's fourth-largest retailer, described him as a "pioneer".

"With his self-service cash-and-carry concept, he revolutionized the sector in the mid 1960s," Metro Chief Executive Olaf Koch said in a statement.

The group's operations include the Kaufhof department stores familiar to German cities, supermarkets, consumer electronics stores and cash and carries in Moldova and Japan. It had turnover of 66.7 billion euros ($89 billion) in 2012, almost half of which came from the cash and carry division.

Last year was a tough one for the group, which issued a profit warning, lost its place in the Dax index of leading German shares and received downgrades to its credit ratings.

Declining spending by shoppers in Europe worried about the euro zone debt crisis and the rise of internet retailers have also contributed to its shares losing 15 percent of their value over the past year.

A spokeswoman for the Beisheim Group said there were no plans to sell the billionaire's near-10 percent stake in Metro. He was the third-largest shareholder behind the Haniel and Schmidt-Ruthenbeck families, which together own 45.78 percent.

Beisheim's net worth was estimated at $3.3 billion by Forbes in March 2012, making him Germany's 22nd richest person.

He supported the Otto Beisheim School of Management, which took his name after a major donation, and was behind the redevelopment of the Beisheim Center on Berlin's Potsdamer Platz, an office and shopping complex that houses the five-star Ritz Carlton and Marriott hotels.

A widower with no children, Beisheim's assets will be divided between two foundations to foster cultural and business projects.

However, his image has been clouded by his role in the Second World War. German media reports have said that he was a member of Hitler's Waffen-SS. The spokeswoman for the Beisheim Group said only that he was a low-ranking member and switched to a different division in 1942. ($1 = 0.7490 euros)

(This story has been refiled to remove extraneous word from first para)

(Reporting by Matthias Inverardi; Writing by Victoria Bryan; Editing by Jeremy Gaunt and David Goodman)

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