British retail group Tesco has agreed to sell its business in Poland to Denmark’s retail group Salling Group A/S for £181m. The deal includes 301 stores together with two distribution centers and head office.
The transaction is subject to antitrust approval, said Tesco. ”Total enterprise value agreed for the transaction is PLN 900m (equivalent to £181m), with total net proceeds expected to be approximately PLN 819m (equivalent to £165m), settled in cash, with completion expected in the current financial year.”
All 301 stores included in the transaction will be rebranded during an 18-month transition period.
”We have seen significant progress in our business in Central Europe, but continue to see market challenges in Poland. Today’s announcement allows us to focus in the region on our business in the Czech Republic, Hungary and Slovakia, where we have stronger market positions with good growth prospects and achieve margins, cashflows and returns which are accretive to the Group,” commented Dave Lewis, Chief Executive of Tesco.
Salling Group A/S is 100% owned by the Salling Foundations from Denmark and serves 11 million customers every week across Germany, Poland and Denmark, with 50,000 colleagues and an annual turnover of approximately GBP 7bn.
In addition, British retail group Tesco has made progress in selling its remaining properties in Poland outside of this transaction. Over the past 18 months, the Group has either sold or agreed to sell 22 stores for net proceeds of c.£200m. The Group will continue to seek to realise value from the remaining assets, which include 19 currently trading stores not covered in this transaction.