Tesco has pulled out from Asia after announcing it is selling its businesses in Thailand and Malaysia.
Britain’s largest retailer stated the sale would provide an £8 billion cash boost, before tax and other transaction costs, with shareholders set for a £5bn windfall.
The sale will see it dispose of 2000 stores in Thailand, and 74 in Malaysia.
Tecso revealed the sale had materialised after receiving “inbound interest” into their business in the region, which is made up of CP Group entities. The move follows quickly after Tesco sold its share in Chinese retail partnership Gain Land.
The supermarket said the Thai and Malaysian sale will “further de-risk the Tesco business by reducing indebtedness” with a pension contribution of £2.5bn.
The company added the sale is “expected to eliminate the current funding deficit and significantly reduce the prospect of having to make further pension deficit contributions in the future”.
The deal is expected to be tied up in the second half of 2020.
'Following inbound interest and a detailed strategic review of all options, we are announcing today the proposed sale of Tesco Thailand and Tesco Malaysia,” said CEO Dave Lewis, who will step down from the role in May.
“This sale releases material value and allows us to further simplify and focus the business, as well as to return significant value to shareholders. I would like to thank all of our Tesco Thailand and Tesco Malaysia colleagues for their dedication, professionalism and service to our customers, which has resulted in the creation of such a strong business.
“I am confident that the agreement we have reached with CP Group presents an exciting opportunity for their continued success.'
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