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Disposal of the Group’s interests in Spar Switzerland
THE SPAR GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1967/001572/06)
JSE and A2X share code: SPP
ISIN: ZAE000058517
("SPAR", the "Company" or the "Group")
DISPOSAL OF THE GROUP'S INTERESTS IN SPAR SWITZERLAND
1. INTRODUCTION
1.1. SPAR is pleased to announce that on Monday, 8 September 2025, it entered into a sale
and purchase agreement ("SPA") with Tannenwald Holding AG ("Buyer"), pursuant to
which SPAR disposed of its entire shareholding in SPAR Holding AG ("SPAR
Switzerland") (the "Transaction") for a total equity value of CHF 46.5 million
(approximately R1 025 million) (the "Purchase Consideration").
1.2. In addition, SPAR shall be entitled to further earn-out payments of up to CHF 30 million
(approximately R660 million) ("Earn-Out Payments") due at the end of 2027 based on
the actual achieved EBITDA of SPAR Switzerland for FY26 and FY27.
1.3. The Buyer has assumed all debt outstanding by SPAR Switzerland to third party
financiers.
1.4. Pursuant to the Transaction, all guarantees issued by the Group to UBS in relation to the
Swiss business have been released.
1.5. The Transaction resulted in a cash outflow from the Group of CHF 31 million (R 683
million), including CHF 11.5 million (R253 million) reserved for settlement of the Swiss
Competition Commission ("COMCO") fine. Potential earn-out proceeds of up to CHF 30
million (R 660 million) may be received in 2027.
1.6. The SPAR Board and Management team are very pleased with the outcome of this
process. The Transaction will strengthen the Group's balance sheet through a
significant reduction of debt levels and will enhance the Group's financial flexibility.
Further, with the completion of the Transaction, the Group has removed all international
cross-border guarantees, i.e. the SA 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.
OVERVIEW OF SPAR SWITZERLAND AND RATIONALE FOR THE TRANSACTION
1.7. SPAR Switzerland is a wholly owned subsidiary of the Group and the holding company
of SPAR's Switzerland assets serving approximately 358 stores and owning 11 cash &
carry outlets and one distribution centre. SPAR Switzerland operates under several
formats in Switzerland including SPAR, SPAR Express, EUROSPAR, Maxi and TopCC.
1.8. In 2024, the Group initiated a strategic review of its European assets as part of a broader
effort to future-proof the business, streamline operations and to optimise returns.
Following the completion of the strategic review and having extensively reviewed
alternatives and various value unlock options, the Board resolved that a disposal of its
entire stake in SPAR Switzerland to an appropriate purchaser would be in the best
interests of the Group's shareholders and its long-term strategic priorities. In May 2025,
in its interim results, the Group classified SPAR Switzerland as an asset "held for sale"
and incurred a R 3 billion impairment in the period.
1.9. The Group had initially acquired a 60% shareholding in SPAR Switzerland for CHF 44.5
million (R 685 million) in April 2016, in line with its then strategy to geographically
diversify the business portfolio and revenue streams. Expansion into the Swiss market
at the time was an opportunity for the Group to invest in a stable market with growth
potential. The investment was funded by the raising of equity capital.
1.10. As part of the original transaction in 2016, the previous shareholders of SPAR
Switzerland were awarded a five-year put option in terms of which SPAR was obliged to
acquire the remaining 40% shareholding. When the put option was exercised in March
2021, it amounted to CHF 56.3 million (R 920.4 million) with the funding raised by SPAR
Switzerland flowing to an intermediate holding company, SAH, (the holding company of
SPAR Switzerland). This resulted in SAH having acquisition-related debt owing to SPAR
Switzerland of CHF 66 million (approximately R 1,455 million), including interest
("Historical Acquisition Debt") as at the date of closing.
1.11. The Historical Acquisition Debt, which could have taken any manner of form (e.g.
issue of shares; use of South African cash resources; raising of debt off the back of the
South African Balance Sheet, etc.) is a legacy liability that needs to be settled.
Accordingly, prior to the implementation of the Transaction, the Group injected
CHF19.5 million (approximately R430 million) into SAH which was used to part-settle the
Historical Acquisition Debt. The remainder of the Historical Acquisition Debt has been
assumed by the Buyer in exchange for an offset against the Initial Purchase
Consideration payable under the Transaction.
1.12. Any proceeds from the Earn-Out Payments will be applied towards further
deleveraging the Group.
2. UPDATE ON SWISS COMPETITION COMMISSION INVESTIGATION
2.1. As previously advised in the Group's 2024 integrated report, in October 2024, the Swiss
business was issued with a notification of an 'Intention to Sanction' from the COMCO
regarding findings in connection with compensation received from a trading and service
cooperative. Subsequently, in July 2025, the COMCO recommended a significantly
reduced fine of CHF 11.5 million (R 253 million).
2.2. SPAR considered appealing this subsequent ruling; however, in accordance with the
Group's strategic priority to exit Switzerland within the planned timeframe and
strengthen the Group's balance sheet, SPAR has agreed not to pursue further litigation
contesting the CHF 11.5 million (R 253 million) fine imposed by COMCO.
2.3. As part of the closing of the Transaction, the Group has agreed with the buyer that they
will settle this liability with the funds provided by SPAR per paragraph 1.5 above. This
ensures that the Group can make a clean exit from Switzerland and provides certainty in
respect of this potential liability.
3. CONDITIONS PRECEDENT TO THE TRANSACTION AND EFFECTIVE DATE
The Transaction is not subject to any competition or anti-trust approvals nor other
conditions precedent. The effective date of the Transaction was Monday, 8 September
2025.
4. CATEGORISATION OF THE TRANSACTION
The Transaction, considering the Purchase Consideration including the maximum Earn-
Out Payments that may become payable under the Transaction, is not a categorizable
transaction for SPAR in terms of paragraph 9 of the JSE Limited Listings Requirements
and is therefore not subject to shareholder approval.
5. INVESTOR CALL
SPAR management will host an investor call at 12:15 (SAST) on Tuesday, 9 September
2025 to answer investor questions in relation to the Transaction. Investors can register
here: https://www.corpcam.com/Spar09092025
Umhlanga
9 September 2025
Corporate broker and transaction sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)
Joint financial advisers
Rand Merchant Bank (a division of FirstRand Bank Limited)
Clairfield Switzerland (Franzen & Company AG - Exclusive Swiss partner of Clairfield International)
Date: 09-09-2025 07:05:00
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