SPAR pays R680 million to exit international business

SPAR said that it has entered into a sale and purchase agreement with Tannenwald Holding, in which it will dispose of its entire shareholding in SPAR Switzerland for a total equity value of CHF46.5 million (about R1,025 million).

The retailer will also be entitled to further earn-out payments of up to CHF 30 million (approximately R660 million) due at the end of 2027 based on the actual EBITDA achieved in FY26 and FY27. 

Tannenwald has also assumed all debt outstanding by SPAR Switzerland to third-party financiers.

However, the sale resulted in a cash outflow of CHF 31 million (R683 million) for the group.

This includes CHF 11.5 million (R253 million) reserved for a settlement with the Swiss Competition Commission. 

The fine regards findings concerning compensation received from a trading and service cooperative. 

Although SPAR considered appealing the ruling, it decided to avoid further litigation to pursue the planned timeframe of its Switzerland exit.

“The Transaction will strengthen the group’s balance sheet through a significant reduction of debt levels and will enhance the group’s financial flexibility,” said the group. 

“Further, with the completion of the transaction, the group has removed all international cross-border guarantees, i.e. the South African balance sheet now has no remaining guarantees in respect of international subsidiaries.” 

The group said that the transaction will also help free up capacity and capital to focus on strategic growth priorities in the group’s remaining core geographies.

SPAR Switzerland’s assets serve  358 stores and owns 11 cash & carry outlets and one distribution centre.

It operates under several formats, including SPAR, SPAR Express, EUROSPAR, Maxi and TopCC. 

​​The sale is not subject to any competition, anti-trust approvals, or other conditions precedent, with the effective date being Monday, 8 September 2025. 

Restructuring 

The sale forms part of the group’s strategic review of its European assets, which began in 2024. 

The review is part of a “broader effort to future-proof the business, streamline operations and optimise returns.”

Following the strategic review, the board resolved that a disposal of its entire stake in SPAR Switzerland would be in the best interests of its shareholders and its long-term strategic priorities.

In its interim results in May 2025, the group classified SPAR Switzerland as an asset “held for sale” and incurred a R3 billion impairment in the period.

The group also classified its British business AWG as a discontinued operation.

These Swiss and British businesses recorded aggregated post-tax losses of R4.4 billion over the period, which included impairments of R4.2 billion.

The group had already disposed of SPAR Poland for R185 million, but needed to pay R2.7 billion to recapitalise the business for Polish buyer Specjal. 

Regarding the Polish business, the group said the deal removed a loss-making business from the balance sheet and allowed it to focus on its core business in South Africa. 

Despite selling three European businesses, the SPAR group looks set to keep hold of its Irish subsidiary.

Issued on BusinessTech by Luke Fraser | https://businesstech.co.za/news/finance/837130/spar-pays-r680-million-to-exit-international-business/