Sainsbury's to sell Argos to Swift Partners in £120m deal

(Sharecast News) - Supermarket chain Sainsbury's has agreed to sell Argos to newly formed retail vehicle Swift Partners, in a deal it said would allow the group to sharpen its focus on its core food business.

Swift Partners - backed by retail veterans Richard Pennycook, Trevor Strain and Matt Truman alongside True Capital - will take ownership of Argos' standalone stores, storeinstore sites, online channels, logistics network and sourcing offices, with completion expected to take place in February 2027.

Sainsbury's said on Friday that it expects cash proceeds of at least �120m, including upfront and deferred payments and the sale of an Argos distribution centre, though these will be offset by separation costs over the following three years. Leaseadjusted net debt was forecast to fall by around �250m, reflecting reduced lease liabilities, while Sainsbury's will retain responsibility for Argos' definedbenefit pension scheme. The transaction will trigger a noncash impairment of about �350m.

The pair have agreed to longterm commercial arrangements covering Argos stores inside Sainsbury's, Nectar and Nectar360, and Habitat, which the supermarket said would support continuity and generate ongoing income. Sainsbury's expects the deal to have a broadly neutral impact on underlying operating profits, with lost Argos contribution offset by commercial income and lower lease interest costs, resulting in low singledigit earnings per share accretion and improved retail free cash flow.

The FTSE 100-listed firm added that full separation was expected by February 2029.

As of 0815 BST, Sainsbury's shares were up 5.12% at 373.90p.

Reporting by Iain Gilbert at Sharecast.com

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