Major South African retailer sells Swiss business for R1 billion

SPAR is selling its Swiss business for around R1.03 billion as part of a broader effort to exit some of its European operations and focus on its core geographies.

The retailer will also be entitled to another payment of up to R660 million based on SPAR Switzerland’s earnings over the next two financial years.

SPAR Switzerland is a wholly owned subsidiary of SPAR, with around 358 stores, 11 cash-and-carry outlets, and one distribution centre.

SPAR announced on Tuesday, 9 September, that it plans to sell SPAR Switzerland to Tannenwald Holding, a Swiss holding company based in Basel. Tannenwald will also assume all of the Swiss business’s outstanding debt.

As part of this deal, SPAR had to pay R683 million to settle a fine with the Swiss Competition Commission.

The retailer hopes the earn-out proceeds of up to R660 million, which may be received in 2027, will recover part of this cost.

“The SPAR board and management team are very pleased with the outcome of this process,” the retailer said. 

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

In addition, SPAR explained that, with the completion of the transaction, it has removed all international cross-border guarantees.

This means its South African balance sheet now has no remaining guarantees in respect of international subsidiaries. 

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

This transaction comes after SPAR concluded the sale of its Polish business earlier in 2025, as part of a broader effort to narrow the retailer’s focus on its core operations.

While SPAR’s interest in Switzerland only started in 2016, the business has experienced many challenges over the past few years.

Swiss struggles

SPAR first acquired a stake in SPAR Switzerland in April 2016, when it bought a 60% shareholding for R685 million.

At the time, SPAR sought to diversify its portfolio and revenue streams by expanding geographically.

“Expansion into the Swiss market at the time was an opportunity for the group to invest in a stable market with growth potential,” the retailer explained. 

As part of the original 2016 transaction, SPAR Switzerland’s previous shareholders were awarded a five-year put option, which required SPAR to acquire the remaining 40% stake. 

When the put option was exercised in March 2021, it amounted to R920.4 million.

This resulted in SAH, SPAR Switzerland’s holding company, having acquisition-related debt owing to SPAR Switzerland of around R1.46 billion, including interest.

This debt is a legacy liability that needs to be settled. Therefore, prior to this sale transaction, SPAR injected about R430 million into SAH, which was used to settle part of the debt.

Now, Tannenwald has acquired the remainder of the debt in exchange for an offset against the initial purchase consideration price for SPAR Switzerland.

In addition to this debt, the Swiss business also received a notification of an ‘Intention to Sanction’ from the Swiss Competition Commission (COMCO) in October 2024.

This was related to findings about compensation received from a trading and service cooperative. 

In July 2025, the COMCO recommended a significantly reduced fine of around R253 million.

While SPAR considered appealing this ruling, it knew at the time that it planned to exit Switzerland and agreed not to pursue further litigation.

Therefore, SPAR decided to settle the fine to make this sale as smooth as possible and ensure a clean exit from Switzerland.

However, this break was not as clean as the retailer hoped, as it classified SPAR Switzerland as an asset “held for sale” in its interim results in May 2025. This saw the retailer incur a R3 billion impairment.