Tesco sells its Polish business to Salling Group for £181 million

Tesco (LON: TSCO) announced on Thursday that it has finalised an agreement to sell its business in Poland for roughly £181 million. Following the completion of the transaction, the British supermarket group will have its operations in central Europe primarily confined to Slovakia, Hungary, and the Czech Republic. Earlier in June, Tesco said its CFO Alan Stewart will retire next year in April.

Shares of the company were reported less than 1% up in premarket trading on Thursday. At £2.27 per share, Tesco is roughly 10% down year to date in the stock market after recovering from a low of £2.1 per share in March. Learn more about how to invest in the stock market.

Tesco sold its Malaysian and Thailand businesses in March

The UK-based supermarkets, including Tesco, have taken a significant hit in recent months due to the Coronavirus pandemic that has so far affected a little under 300,000 people in the United Kingdom and caused more than 42,000 deaths.

Pulling out of its lofty global ambitions, Tesco recently adjusted its strategy to withdraw from a few of its non-profitable markets. Earlier in 2020, the retailer announced to have sold its businesses in Malaysia and Thailand.

In its announcement on Thursday, Tesco also expressed confidence in sufficient growth prospects its robust market position in Hungary, Czech Republic, and Slovakia. Other than these three central European markets, Tesco’s overseas operations are now limited to Ireland only.

Tesco expects £165 million of net proceeds in cash

Tesco has a total of more than 340 stores in Poland that makes the country its largest central European market. The British multinational grocer said on Thursday that it has struck a deal for 301 stores with Salling Group that valued its Polish business at £181 million. Tesco expects £165 million of net proceeds in cash.

The aforementioned proceeds are on top of about £200 million that the Welwyn Garden City-headquartered retailer received via a sale of around 22 stores in Poland. Following the completion of the deal, Tesco will be left with 19 currently trading stores in Poland. From the remaining assets, the British grocer says it plans on continuing to seek value.

Tesco performed largely upbeat in the stock market last year with an annual gain of about 30%. At the time of writing, the British multinational groceries and general merchandise retailer has a market cap of £22.36 billion and a price to earnings ratio of 23.94.