Grocery retailer Tesco has agreed to sell its businesses in the Czech Republic and Slovakia to Dutch supermarket giant Ahold Delhaize for £1.5bn.
Tesco said it was selling the businesses to the owner of the Albert Heijn supermarket chain so it could focus on the UK, where it is the largest grocery retailer by market share, and Ireland.
Completion of the sale, which is subject to antitrust and other regulatory approvals, is expected in the second half of 2027.
The deal includes all stores and offices in the Czech Republic and Slovakia, and distribution centres in Kralupy, Presov and Beckov.
The sale price represents a total enterprise value on a cash and debt-free basis, and Tesco expects the net cash proceeds before tax and other costs to total £1bn.
“The transaction will further simplify the group, increasing our focus on our core UK and Irish businesses and supporting our continued investment in our food-first retail ecosystem and the capabilities that will drive future growth, while enabling a further return of capital to shareholders,” said Ken Murphy, chief executive of Tesco.
“Until the transaction completes, our businesses in the Czech Republic and Slovakia remain part of Tesco and our priority remains to continue serving customers and supporting colleagues.”
Tesco’s latest results show the Czech Republic and Slovakia businesses generated annual combined sales of £2.9bn and the majority of the group’s £115m adjusted operating profit reported for the central European region.
Since 2021, not including this latest deal, Tesco has released £500m from the sale of non-core property in central Europe, including a number of large shopping malls.