Tesco to sell Czech, Slovak businesses to concentrate on the UK and Ireland

Tesco holds a 24% share of the Irish grocery market, just behind Dunnes Stores on 24.8%.  Picture: Denis Minihane.

Tesco is to sell its businesses in the Czech Republic and Slovakia to Dutch retailer Ahold Delhaize for an enterprise value of €1.7bn, marking the latest step in its long retreat from overseas markets.

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.

Tesco is Britain's largest supermarket chain with a 27.8% market share and holds a 24% share of the Irish grocery market, just behind Dunnes Stores on 24.8%

Along with its large supermarkets, it also operated a growing number of Tesco Express outlets, opening three in Ireland this year, bringing the number here to 62.

Publishing results in June, the company said sales in Ireland had grown 5.56% to £838m (€966m), boosted by strong growth in food sales and online shopping.

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

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 €1.2bn before tax and other transaction costs for Tesco.

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

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

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.

Reuters