CZECH: Ahold to buy Spar's Czech stores
Albert owner Ahold said deal marked "exciting new phase" for business
The Dutch retail giant, which runs the Albert chain in the country, said it would buy 50 outlets - 36 "compact hypers" and 14 supermarkets.
The Spar stores generated CZK12bn (US$607.7m) of sales last year. Ahold said the deal gave the Netherlands-headquartered retailer's Czech business an enterprise value of CZK5.25bn.
Ahold has 284 stores in the Czech Republic and said it would have 330 following the acquisition, indicating it would close four outlets.
The retailer claimed the deal would make it "the number one food retailing brand in the country".
Ahold has faced challenges in the Czech Republic in recent years, from competition, depressed consumer confidence and a struggling hypermarket format. The retailer has worked to remodel its hypermarkets into the compact format.
In 2013, Ahold's net sales in the country fell 4.7% to EUR1.45bn (US$2.01bn), in part due to foreign exchange. However, in local currency, sales dropped 1.5% and identical-store sales were down 1.7%.
Nevertheless, Ahold said its share of the Czech market was "comparable" to 2012 and its underlying operating margin - when measured in local currency - was 2.1%, up from 1.8% the year before.
Announcing the deal, Ahold CEO Dick Boer said the retailer had been "continued to successfully improve" the performance of its Czech business and called the acquisition "an important strategic step".
He added: "It allows us to combine two companies that have a natural fit and that share a continuous focus on quality and value."
Spar's Czech business is managed through its Austrian subsidiary. Rudolf Staudinger, board director responsible for foreign operations at the Austrian Spar AG, said: "Our company strategy entails that we manage to establish a satisfying market position in the countries we do business in. Our conclusion was that this could not be realized in the Czech Republic and we will concentrate on other markets such as Italy, Hungary, Slovenia and Croatia."
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