Supermarket group Tesco said today it would sell its Czech and Slovak businesses to Dutch peer Ahold Delhaize for an enterprise value of €1.7 billion, extending its withdrawal from overseas markets.
The British grocer said it expected to return the majority of net cash proceeds of €1.2 billion before tax and other transaction costs to shareholders through an incremental share buyback.
Shares in Tesco are up 21% so far this year.
“We think the deal price looks quite expensive, and would therefore be more positive on the implications for Tesco than we would for Ahold,” analysts at Bernstein said.
Analysts have long viewed Tesco’s Central European division, which also includes Hungary, as an anomaly, given that the group has since 2015 divested nearly all of its overseas assets, including businesses in South Korea, Thailand and Malaysia, to focus on the UK market.
The Czech Republic and Slovakia generated sales of £2.9 billion and the majority of the £115m adjusted operating profit reported for the Central European region in the 2025/26 financial year – about 4% of total group profit.
“The transaction will further simplify the group, increasing our focus on our core UK and Irish businesses,” Tesco CEO Ken Murphy said. “I am delighted that Ahold Delhaize intends to invest in both markets,” he added.
The Dutch group already has operations in the Czech Republic, where it operates the Albert supermarket chain.
Completion of the deal, which is subject to antitrust approvals, is expected in the second half of 2027.
Tesco said it will continue to review “all options” for the future of the Hungary business.
Tesco has been investing heavily in its home market, where it has a market share of about 28%. Sales growth did, however, slow in its second quarter.
