Tesco to sell Czech, Slovak businesses to Ahold Delhaize in $1.9 billion deal

Tesco to Sell Czech and Slovak Operations to Ahold Delhaize in $1.9bn Deal

Overview of Tesco's Strategic Divestment

Background of the Deal

Oct 30 (Reuters) - Tesco, Britain's largest supermarket chain, said on Friday it will sell its businesses in the Czech Republic and Slovakia to Dutch retailer Ahold Delhaize for an enterprise value of €1.7 billion ($1.90 billion), marking the latest step in its long retreat from overseas markets.

International Divestments

The British retailer has divested a number of its international businesses over the past decade, leaving the Central European operation as one of its last significant presences outside the United Kingdom and Ireland, where it generates the bulk of its revenue.

Ahold Delhaize’s Presence in Central Europe

Ahold Delhaize already has operations in the Czech Republic, where it operates the Albert supermarket chain. 

Deal Structure and Financial Impact

Assets Included in the Sale

The deal, which includes all stores and offices in the Czech Republic and Slovakia, and distribution centres in Kralupy, Presov and Beckov, is expected to generate net cash proceeds of €1.2 billion before tax and other transaction costs for Tesco.

Shareholder Returns

The company plans to return the majority of that to shareholders through an incremental share buyback following the deal's completion.

Exclusions and Future Plans

Hungarian Operations

Tesco said its operations in Hungary were not part of the deal and it would continue to review options for that business separately. 

Financial Outlook

It expects the deal to be broadly neutral to earnings per share and its net debt to EBITDA ratio following completion of the buyback, with completion targeted for the second half of 2027.

Additional Information

($1 = 0.8957 euros)

(Reporting by Yamini Kalia in Bengaluru; Editing by Sonia Cheema, Kirsten Donovan)