Belgian supermarket group Delhaize has reached a definitive agreement to sell Delvita, its Czech business, to German retailer Rewe, marking its exit from the market. Rewe has agreed to pay EUR100m (US$128.36m) for the business, subject to contractual adjustments.

Rewe already operates the Billia supermarkets and Penny Market discount stores in the Czech Republic. The acquisition will see the number of supermarkets operated by Rewe in the Czech Republic double to more than 170 outlets, establishing Billa as the number one supermarket brand in the region. Most of the 95 Delvita stores will be converted to the Billia banner in the next two years, Rewe said.

Delhaize entered the Czech market in 1991 through Delvita. In 2005, Delvita sold its Slovakian stores to Rewe. In 2005, Delvita recorded sales of EUR282.2m and an operating loss of EUR1.5m.

Pierre-Olivier Beckers, president and chief executive officer of Delhaize Group, said: “Some days ago, we announced that we had taken the difficult decision to sell our Czech activities after careful evaluation of their contribution to our portfolio and their future requirements. Today, we are satisfied to announce that we have reached an agreement with Rewe, as we believe the combination of Delvita and Billa will result in a strong competitor in the competitive Czech market and create continuity and opportunities for our people in the new organization. I want to thank all our Czech colleagues for their dedication and wish them all the best for future success in their new corporate environment.”

Rewe emphasised the importance of the Czech Republic to its global vision. “Because of its central location and its size – it is the fifth largest market in Central and Eastern Europe – the Czech Republic plays an immensely important role in our internationalisation strategy. The Rewe Group is committed to further increasing its international share, which has already reached 32%, in the coming years”, said Alain Caparros, the spokesman of the management board of Rewe, about the company’s involvement in the Czech Republic. According to Caparros, the acquisition of the Delvita stores will result in a much more close meshed distribution network and enhance the company’s impact in the country.

The agreement includes the provision that contractual employees of Delvita continue under Rewe ownership.

Closing is subject to the customary conditions, including approval by the appropriate competition authorities.