Rewe, the German retailer, has agreed to buy Tengelmann's Plus discount chain in the Czech Republic. The deal, which was agreed to for an undisclosed sum, involves Tengelmann selling its 'know-how', while the buildings in which Plus stores are located will be retained by Tengelmann, which will rent these out to Rewe.

UK-based Tesco attempted to acquire Tengelmann's Czech stores towards the end of 2007 for a reported €200 million, but the deal fell though. Rewe has bought the 146 Plus stores in the Czech Republic and is said to be looking to merge the business with its own discount chain, Penny.
 
Rewe runs 96 Delvita supermarkets in the Czech Republic, as well as a 181-strong chain of Billa stores. The Plus discount chain comprises 146 discount stores, which Rewe plans on merging with its Penny Market discount chain. If approved by the country's Competition Commission, this acquisition will give Rewe a chain of 317 stores, with over €1.2 billion in annual sales, as Rewe makes it clear that the Czech Republic remains a high-priority market in its growth strategy.

Tengelmann is just the latest major player to exit this highly competitive market. In 2005, two major retail operators withdrew from the Czech Republic. The second-largest retailer in the world, Carrefour, departed and had its outlets acquired by Tesco, while Austrian Julius Meinl sold more than 50 of its supermarkets to Dutch Ahold. This was followed in 2007 by Rewe's acquisition of Belgian retailer Delhaize's Delvita supermarket chain after the European Commission ruled that this would not hurt competition in the Czech Republic or the wider EU region.