Tesco PLC is negotiating the divestiture of its Central and Eastern European business, covering 22,000 employees across 561 stores in Hungary, the Czech Republic and Slovakia.

The unit generated £4.5bn in revenue last year but only £115mn of the group’s £29.6bn valuation(rendered as a modest profit margin). Earlier divestments, including the £4.2bn sale of Homeplus in South Korea and an £8bn deal for its Thailand and Malaysia unit, trimmed the retailer’s overseas footprint after a 2014 accounting scandal.

A sale would free cash for Tesco to deepen price‑cutting in the UK, support planned share buybacks and further investment in data monetisation through the Clubcard platform. The move would also signal a strategic retreat from the highly competitive Aldi and Lidl markets.

For investors, the transaction could lift the share price and improve dividend prospects while reducing regulatory exposure in the region. Business leaders will likely redirect proceeds toward technology upgrades and operational efficiency in the core UK market.