French retail group Casino has disposed of its main assets in Poland for a total of GBP884m (US$1.109bn), selling its Géant hypermarkets to German-based Metro AG and Leader Price convenience stores to the UK’s Tesco.
Metro’s sales division, Real, will acquire 19 Géant hypermarkets for EUR224m, meaning Real Poland will have a workforce of over 13,000 employees and sales of around EUR1.3bn.
“With this move, Real is consistently pursuing its targeted expansion strategy“, said Dr Hans-Joachim Körber, CEO of the Metro AG. “It optimally complements our store portfolio in Poland and raises the sales and earnings potential. This takeover will strengthen the international position of Real as a whole.”
The underlying Géant hypermarkets real estate will be sold for EUR555m to GE Real Estate in a transaction that is expected to close during the third quarter of 2006.
Around 140 Leader Price stores, not including franchises, were acquired by Tesco for EUR105m, in a bid to bolster the group’s Polish operations.
Kevin Grace, CEO of Tesco Poland, said: “This deal is good news for customers. Convenience, low prices, service and quality have become the hallmark of Tesco in Poland and we look forward to bringing these benefits to more communities.
“After ten years of trading in Poland Tesco has built up a strong local business employing over 20,000 people and working with over 1,500 Polish suppliers.”
This transaction reduces Casino’s debt by EUR925m, and will have an immediate accretive impact on the retailer’s net income.
The entire workforce will be transferred to the purchasers of the retail operations or kept within Casino to ensure management and future valuation of the real estate portfolio, the group added.
The Real and Tesco transactions will be completed by the end of this year.