Kingfisher (LON: KGF) saw its share price rise around 1.4% in early Monday trading after it announced the sale of its Brico Dépôt Romania business to Altex Romania for an enterprise value of €70 million (£58 million).
The deal includes all of the 31 stores across 24 cities, distribution operations, and the head office in Bucharest, according to Kingfisher.
The sale, expected to be finalised in the first half of FY 2025/26, is expected to allow Kingfisher to refocus on its core markets and growth initiatives.
“We are pleased to have found an experienced and successful local buyer for Brico Dépôt Romania. This decision enables us to have greater strategic focus on markets and growth initiatives where we are most strongly positioned to deliver attractive returns and create shareholder value,” said Kingfisher CEO Thierry Garnier, who also noted there was strong interest in the business.
Altex Romania, an electro-IT retailer, believes the acquisition is a key milestone in expanding its presence in the Romanian DIY market.
Altex CEO Dan Ostahie stated: “Our primary goal is to continue growing while delivering quality services with the customer at the center of our focus. Our growth strategy is built on an omnichannel model, ensuring a seamless and enjoyable shopping experience for customers, regardless of the sales channel they choose.
“I want to convey a message of confidence to all Brico Dépôt customers, employees, and partners. We are committed to developing this business by bringing innovation and efficiency to every aspect of the operation.”
Brico Dépôt Romania reported £269 million in sales in FY 2023/24 but operated at a loss of £18 million. Kingfisher initially entered Romania in 2013 by acquiring Bricostore and expanded further in 2017 with Praktiker Romania.
This sale does not affect Kingfisher’s Brico Dépôt banners in France, Spain, or Portugal.
Following the news, analysts at Citi said the sale “enables the group to have tighter strategic focus across its core markets to drive further shareholder value.”
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“We believe a potential exit of Romania was likely on the cards and the news is not a complete surprise,” added the bank. “The exit should help partly offset some of the cost headwinds next year and support investor sentiment.”
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