Tesco has agreed to sell its businesses in the Czech Republic and Slovakia to Ahold Delhaize in a €1.7bn ($1.90bn) transaction on a cash- and debt-free basis.
The proposed disposal covers all Tesco stores and offices in the two countries, as well as distribution centres in Kralupy, Presov and Beckov.
The supermarket chain said the transaction is expected to deliver net cash proceeds of €1.2bn before tax and other transaction costs.
The deal is subject to antitrust and other regulatory approvals, and completion is expected in the fourth quarter of 2027.
Tesco CEO Ken Murphy said: “For Tesco, 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.”
After completion, Tesco plans to return most of the net cash proceeds to shareholders through an incremental share buyback.
The businesses included in the sale generated combined sales of £2.9bn ($3.88bn) and represented the majority of the £115m adjusted operating profit recorded for Tesco’s Central European region in the previous 52-week period.
Ahold Delhaize said the acquisition will strengthen its position in Central and Southeastern Europe and provide a larger presence in the neighbouring Slovak market.
Tesco Czechia and Slovakia include more than 360 self-operated supermarkets, hypermarkets and convenience stores, alongside more than 100 franchise stores.
The two businesses generate €3.5bn in sales and employ more than 14,000 people.
Tesco said Hungary is excluded from the agreement and will remain under its ownership and operation.
The company also said it will continue to review options for the future of its Hungarian business.
Ahold Delhaize CEO Frans Muller added: “This acquisition is an important step in strengthening our position in the Central and Southeastern European region. It brings together highly complementary businesses with strong local market expertise and gives us the opportunity to expand into Slovakia, an attractive adjacent market.”
