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Tesco sells Turkey business for £30m to Migros

Tesco has sold its grocery business in Turkey for £30m to private equity-backed local competitor Migros, underlining the attractiveness that non-political assets in the politically troubled country still hold for investors.

The UK supermarket chain is shedding non-core assets, especially underperforming overseas businesses, in an effort to refocus on its main business as competitive pressures rise.

It is also selling Giraffe, a family-friendly UK restaurant chain, to Boparan Ventures, an investment vehicle that owns several restaurant businesses including chip shop chain Harry Ramsden’s. Tesco did not disclose the sale price for Giraffe but sources close to the company said it was less than the £49m it paid for it in 2013.

Turkey is a deeply competitive grocery market where local groups have not just fended off rivals, but also gained shares as foreign players have retreated.

Even with 80m potential consumers in a fast-moving consumer goods market estimated to be worth about $24bn a year, chains such as Carrefour and Tesco have lost market share to local discounters with a better understanding of Turkish buying habits.

Migros, backed by European private equity group BC Partners since 2008, has more than 50 years experience and nearly all Turkish management and has fared comparatively better.

-------------------------------------------------------- [10.06.2016]
Tesco sells Turkey business for £30m to Migros