SPAR Group sells Swiss operations to Tannenwald Holding for over R1bn

SPAR Group has signed an agreement to sell its shareholding in SPAR Switzerland to Tannenwald Holding, a privately held Swiss investment company, for CHF46.5 million, about R1.03 billion.

SPAR Group’s share price went up 4.3% to R109.35 on Tuesday morning, a price that is 10.4% lower than the R122.14 it traded at a year earlier.

The increase indicates the disposal was likely favourably received by investors. SPAR’s major shareholders include the Public Investment Corporation, M&G Investment Management, Coronation Fund Managers, Allan Gray, Old Mutual Investment Group, and Ninety One.

The transaction marks the finalisation of SPAR’s European portfolio review, with only the UK process still underway, and is a step towards optimising capital allocation and strengthening the balance sheet. SPAR Switzerland operated or supplied goods to 252 stores as of 2024, which includes SPAR, SPAR express, and EUROSPAR formats.

Group debt will reduce by about R2.7bn through the disposal, enhancing financial flexibility. In addition, SPAR may receive earn-out payments of up to CHF30 million, linked to the earnings before interest, tax, depreciation, and amortisation (EBITDA) of SPAR Switzerland for the 2026 and 2027 financial years.

While SPAR has no ongoing control over the Swiss business, recent improvements in performance were encouraging and could support the possibility of upside from the earn-out, said the group CEO Angelo Swartz. A central focus for the board was ensuring the Swiss business transitioned into capable local hands.

“The buyer brings deep market knowledge and alignment with the local management team, giving the business and the SPAR brand the best opportunity to prosper in Switzerland, while securing continuity for retailers, employees, and customers,” he said

.He said the sale of the Swiss operations was a positive step in focusing resources on the group’s core geographies, where it was positioned for sustainable value creation above the cost of capital.

“The transaction marks a clean exit from Switzerland, while affording the Swiss business optimal prospects for future growth,” said Swartz. “This is about sharper capital allocation, reducing leverage, and ensuring we are positioned to build on our strengths. SPAR is firmly on track to deliver on its vision of becoming the retailer of choice in its core geographies,” he said.

At the release of half-year results, in June, the group said it was divesting from its businesses in Europe, and it planned to grow in Southern Africa and by enhancing its retail segments, leveraging partnerships such as with Uber Eats and Vida e Caffè, and by growing private label product penetration, offering customers quality and affordability.

For the 26 weeks to March 28,2025, SPAR's headline earnings a share fell 0.4% to 450.1 cents - the business in Switzerland was reported as a discontinued operation at the time. Revenue was flat at R66.1bn (R66.2bn).

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