Tesco announces the sale of its business in Poland to Salling Group A/S. The transaction, which is subject to antitrust approval, includes the sale of 301 stores together with the associated distribution centres and head office.
“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, cash flows and returns which are accretive to the Group,” commented Dave Lewis, Chief Executive of Tesco.
Total enterprise value agreed for the transaction is £181 million (PLN 900 million), with total net proceeds expected to be approximately £165 million, settled in cash, with completion expected in the current financial year. Proceeds from the sale will be used for general corporate purposes.
In addition, the Group has made good progress in selling its remaining Polish property 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. £200 million. The Group will continue to seek to realise value from the remaining assets, which include 19 currently trading stores not covered in this transaction.
All 301 stores included in the transaction will be rebranded during an 18-month transition period.
Salling Group A/S is 100 percent 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 £7 billion.