Tesco Retreats From Poland
Tesco has sold its business in Poland to Salling Group. The transaction, which is subject to antitrust approval, includes the sale of 301 stores together with the associated distribution centres and head office.
Total enterprise value agreed for the deal is PLN900 million (£181 million), with total net proceeds expected to be approximately PLN819 million (£165 million), settled in cash, with completion expected in the current financial year. Proceeds from the sale will be used for general corporate purposes.
Dave Lewis, Chief Executive of Tesco, says: “We have seen significant progress in our business in Central Europe, but continue to see market challenges in Poland. The 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.”
In addition, Tesco 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 about £200 million. Tesco will continue to seek to realise value from the remaining assets, which include 19 currently trading stores not covered in this transaction.
