Ahold Delhaize agrees to buy Tesco's Czech and Slovak business for €1.7bn
The Dutch grocer will add more than 360 self-operated stores and over 14,000 employees to its Albert business. Tesco keeps Hungary and plans a share buyback with most of the net proceeds.
Tesco has agreed to sell its businesses in the Czech Republic and Slovakia to Ahold Delhaize for a total enterprise value of €1.7 billion (about £1.5 billion) on a cash and debt free basis. The British grocer announced the deal at 07:30 on Friday 30 October and expects net cash proceeds of €1.2 billion before tax and other costs.
For Ahold Delhaize, the Dutch-Belgian owner of Albert in Czechia, the deal is an expansion into Slovakia and a bid for the top spot in Czech grocery. Completion depends on antitrust approvals and is expected in the second half of 2027, with Ahold Delhaize pointing to the fourth quarter of 2027.
The deal
The perimeter covers all of Tesco's stores and offices in both countries, plus distribution centres in Kralupy, Presov and Beckov, according to Tesco's regulatory announcement. Ahold Delhaize says the business runs more than 360 self-operated supermarkets, hypermarkets and convenience stores and over 100 franchise stores, with sales of about €3.5 billion and more than 14,000 employees.
The two companies present the price in slightly different ways. Tesco gives an enterprise value of €1.7 billion, which it says corresponds to €1.2 billion on a pre-IFRS 16 basis. Ahold Delhaize says it will pay an enterprise value of about €1.2 billion, corresponding to a lease-adjusted enterprise value of about €1.7 billion. On that basis, it says the price implies about 7.2 times last-twelve-months EBITDA, or 5.0 times including expected synergies.
Ahold Delhaize will fund the purchase with committed financing and existing resources. It expects the deal to be neutral to earnings per share in the first year after closing and said it would have no meaningful impact on its capital return policies. BofA Securities is its financial adviser.
Why Tesco is selling
The Czech and Slovak businesses generated combined sales of £2.9 billion and most of the £115 million adjusted operating profit reported for Tesco's Central European region in the prior year. Reuters put that at about 4% of group profit and described the sale as an extension of Tesco's withdrawal from overseas markets.
"The transaction will further simplify the Group, increasing our focus on our core UK and Irish businesses," chief executive Ken Murphy said. Tesco expects to return the majority of the net proceeds through an additional share buyback after completion, and says the deal should be broadly neutral to earnings per share and its net debt to EBITDA ratio once the buyback is done.
Hungary is not part of the agreement. Tesco said it will keep operating the Hungarian business and continue to review all options for its future. Since 2021 it has also raised about £0.5 billion from selling property in Central Europe.
Why Ahold Delhaize is buying
Ahold Delhaize runs 17 local brands that serve 77 million customers a week in the United States, Europe and Indonesia. After integration and store remodelling, it expects the combination of Albert and Tesco Czechia to become the leading grocery brand in Czechia by market share, and to give it a leading brand position in Slovakia. "This acquisition is an important step in strengthening our position in the Central and Southeastern European region," chief executive Frans Muller said in the company's release.
The company plans to share more details on its third-quarter analyst call on Wednesday 4 November at 10:00 CET.
What it means for founders and investors
Consolidation in Central European grocery is good news and bad news for suppliers and retail tech startups. A larger Albert gains buying power, which puts pressure on food brands and smaller suppliers in Czechia. It also creates one large buyer that is planning to modernise stores and add technology-enabled customer areas, loyalty and omnichannel capabilities, all areas where local and regional software, payments and logistics companies sell.
For investors, the deal is another example of a large European group simplifying its portfolio and handing cash back to shareholders, as seen with Frasers and Hugo Boss on the buying side and spin-offs such as TK Accelis. The long timeline to closing in late 2027, and the antitrust review in Czechia in particular, are the main risks to watch. Remedies such as store disposals are possible in markets where the combined share becomes high, but neither company has said anything about that yet.
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