🛒 SPAR Exits Polish Market with $10M Sale
SPAR Group, South Africa’s major grocery chain, is divesting its underperforming Polish division to local firm Specjal for $10M. This sale marks a strategic shift for SPAR, which is refocusing on its core markets. The deal follows a review of SPAR’s European operations, where the Polish division consistently struggled. Over 2,500 SPAR stores operate across Southern Africa, with this sale designed to help the group concentrate on its home market.
💰 $143M Recapitalization Cost for SPAR
As part of the sale agreement, SPAR will recapitalize the Polish unit for an estimated $143M (R2.7B), primarily to clear its debts. SPAR’s CEO, Angelo Swartz, mentioned that keeping the Polish business would have required “significant time and investment” to make it profitable. Therefore, the divestiture is seen as a move to stabilize the group's finances and regain investor confidence. The announcement caused SPAR's shares to drop by 6.79% to R117.
📈 Strategic Focus on South Africa
SPAR’s South African business is the company’s main growth engine, contributing about 60% of total sales. This divestiture allows SPAR to focus more on its South African operations, where it sees more opportunity for efficiency and profitability. Swartz explained, “Our journey into Poland is coming to an end. However, this deal solidifies our renewed strategic intent,” indicating the company’s commitment to refocus its strategy toward profitable regions.
🚦 Sale Awaits Regulatory Approval
The sale to Specjal is subject to regulatory approvals in Poland. Additionally, SPAR’s recapitalization amount could be adjusted to ensure the Polish division's net asset value is zero at the time of sale. Specjal is expected to leverage its resources to expand the Polish business. Swartz also expressed optimism for the employees in Poland, saying they could thrive under new ownership with more capacity for growth. The sale is expected to conclude in late 2024.
Will SPAR’s exit from Poland boost its South African growth?
