British chain Tesco is selling its businesses in the Czech Republic and Slovakia to Dutch Ahold Delhaize. The total value of the transaction is around €1.7 billion, including lease obligations under IFRS 16. Before accounting for these obligations, the enterprise value is approximately €1.2 billion.
Tesco expects to receive net cash proceeds of around €1.2 billion before tax and transaction costs. The sale is subject to antitrust and other regulatory approvals, and the British company expects to close in the second half of 2027. Ahold Delhaize has indicated the fourth quarter of 2027 as a tentative deadline.
Over 14,000 employees and hundreds of stores
The agreement covers all of Tesco's stores and offices in the Czech Republic and Slovakia, as well as distribution centers in Kralupy, Prešov and Bekov. The operations include more than 360 owned supermarkets, hypermarkets and convenience stores, as well as more than 100 franchised stores. They employ more than 14,000 people.
The Czech and Slovak businesses generated combined sales of 2.9 billion British pounds in the last reported 52-week period. The two countries also accounted for the majority of the £115m adjusted operating profit reported by Tesco's Central Europe region.
The Hungarian operations are not part of the deal and will remain owned and managed by Tesco. The company said it would continue to explore options for the future of its business in Hungary.
Tesco focuses on UK and Ireland
After the deal closes, Tesco plans to focus more resources on its core markets of the UK and Ireland. The majority of the net proceeds are expected to be returned to shareholders through a further share buyback programme.
Murphy thanked employees in the Czech Republic and Slovakia for their contribution over the past 30 years and said that until the transaction is completed, the operations in both countries will remain part of Tesco. Ahold Delhaize, which operates the Albert chain in the Czech Republic, expects the acquisition to increase its scale in Central and Southeastern Europe and expand its presence in the Slovak market.
The company said that after the integration and restructuring of the network, the combined Albert and Tesco business in the Czech Republic is expected to become the leading food chain by market share. However, this will depend on regulatory decisions and the conditions for finalizing the deal.
Sources: creherald.com, za.investing.com