B&M European Value Retail has announced the completion of its German business disposal following a strategic review of the business.
The group’s 80% controlling stake in the business was sold for €12.5m (£10.8 m) to a purchasing consortium led by AC Curtis Salta.
The consortium also includes Wiebke Stern, Sebastian Dorin, Alexander Dorin, STIWEC GmbH and Jalogy Beteiligungs GmbH.
The discount retailer first announced plans to sell its German arm, Jawoll, last November. The business currently totals 89 stores, all located in north west Germany.
At the time, the group reported a 70% drop in profits from £59.5m to £32.3m during the first half of the year, attributed to increased costs at its German branches.
Jawoll’s performance had been impacted by “distribution issues and weak sales performance” due to an impairment charge of £59.5m.
Now, the group has said that €2.5m (£2.2m) will be payable on completion of the transaction, with a further €10m (£8.7m) payable on 31 December 2020, conditional to the on-going trading of Jawoll.
In addition, B&M said that the purchaser’s consortium will repay Jawoll’s bank debt upon completion of the deal, which has a facility limit of up to €16m (£14m).
The sale is expected to be complete within the next 28 days, or by 1 June 2020 at the latest. It is still conditional upon German competition authority clearance being granted.
B&M will continue to trade from its 650 stores across the UK and operate around 100 sites in France, where it trades under the Babou chain.