The Migros Zurich Cooperative (MZC) has conducted a strategic reassessment as part of the restructuring of the Tegut Group. Despite massive cost savings, which reduced Tegut Group's operational losses by more than half last year, the market environment in Germany further deteriorated, leading to declining sales. The comprehensive analysis of the situation clearly showed that under these conditions, Tegut's specific positioning and comparatively small company size are not economically sustainable in the long term.
Various discussions with competitors regarding the acquisition of individual Tegut locations during the restructuring, along with insights from the strategic market analysis, prompted MZC to decide to withdraw from Germany. The option of an overall takeover of Tegut by a retailer not previously present in the German market proved unfeasible. The in-depth conversations with retail chains from the German market subsequently focused from the outset on securing as many jobs as possible and continuing the branches.
'It was extremely difficult for us to decide to sell Tegut. The great commitment of our colleagues in the challenging months past deserves my utmost respect. Nevertheless, the analysis clearly showed that an overall sale under the current market conditions offers the best long-term perspective for all involved – especially for the employees but also for the customers,' explains Patrik Pörtig, CEO of Migros Zurich.
An agreement has already been reached with Edeka, and a corresponding contract has been signed. The contract includes the takeover of a significant part of the Tegut Group. This includes a significant part of the branch portfolio with sales employees, the logistics center in Michelsrombach, the Herzberger bakery, and Smart Retail Solutions, the operator of Teo locations in Germany. Simultaneously, Migros Zurich is conducting talks with other market participants to ensure a solution for the future of as many locations as possible.
The purchase price is subject to a confidentiality agreement between the parties. The handover of the branches to Edeka and other market participants is still subject to approval by the Federal Cartel Office, which is reviewing the competition aspects of the transaction. MZC requests understanding that due to confidentiality, no further details about the branch locations and ongoing discussions with other interested parties can be disclosed at this time.
The financial impact of the transaction will be visible in the 2025 financial statements, which will be published on March 24. The overall settlement will lead to extraordinary expenses, which will burden the results of both the Migros Zurich Cooperative and the Migros Group.