Sainsbury’s has signed a deal to sell Argos to Swift Partners, with the transaction set to deliver cash proceeds of at least £120m ($161.3m).
The UK supermarket group said the disposal would allow it to focus on its core food business and its Next Level Strategy while providing Argos with dedicated ownership to support its future growth
Under the agreement, at least £70m will be paid on completion with a further £50m due over the following three years. The overall amount includes proceeds from the sale of an Argos distribution centre, as well as upfront and deferred payments. Sainsbury’s said the final amount is subject to working capital adjustments and is expected to be offset by costs linked to the separation.
The retailer said the transaction is expected to reduce lease-adjusted net debt by about £250m, mainly due to reduced lease liabilities. It added that the deal will also result in a non-cash impairment charge of around £350m. The assets included in the sale are Argos’ standalone stores, its in-store concessions inside Sainsbury’s supermarkets, its online retail business, logistics network, Argos Care, Argos Pet Insurance, a distribution site in Daventry, and sourcing offices in Shanghai and Hong Kong.