Tesco PLC agreed to sell its grocery businesses in the Czech Republic and Slovakia to Ahold Delhaize NV, pulling the British supermarket giant further back from Central Europe and handing the Dutch-Belgian grocer a leading position in one market and a large new foothold in another.
The deal values the two businesses at about EUR1.7 billion on a lease-adjusted basis, or about EUR1.2 billion before lease liabilities are counted. Tesco said it expects net cash proceeds of roughly EUR1.2 billion before tax and transaction costs and intends to hand most of that money back to shareholders through an additional share buyback once the sale closes.
What Ahold Delhaize gets
The operations include more than 360 company-run supermarkets, hypermarkets and convenience stores and over 100 franchised stores, with about EUR3.5 billion in annual sales and more than 14,000 employees, according to Ahold Delhaize. The buyer already runs the Albert chain in the Czech Republic and expects the combined business, after integration and store remodeling, to become the country’s largest grocery brand by market share. In Slovakia, the purchase marks Ahold Delhaize’s entry into a new market.
Ahold Delhaize said the lease-adjusted price works out to a multiple of about 7.2 on trailing earnings before interest, taxes, depreciation and amortization, or roughly 5 once expected cost savings are included. It will fund the purchase from committed financing and existing resources and said the deal should be neutral to earnings per share in its first year. The company plans to discuss the acquisition with analysts when it reports third-quarter results on Nov. 4.
Tesco narrows its focus
For Tesco, the sale continues a long retreat from overseas markets. The Czech and Slovak units produced combined sales of about 2.9 billion pounds and most of the 115 million pounds of adjusted operating profit Tesco reported for Central Europe in its latest fiscal year. The company has already raised about half a billion pounds since 2021 by selling shopping malls and other property in the region. Hungary remains part of the group, and Tesco said it continues to review options for that business.
Completion depends on antitrust clearance, which the companies expect in the second half of 2027. Tesco said the transaction should be broadly neutral to its earnings per share and leverage after the buyback is completed.
