Tesco has announced it has agreed to sell its Thai and Malaysian businesses to CP Group, a Bangkok-based food, retail and agri conglomerate.
The transaction has an enterprise value of $10.6 billion (€9.27 billion), with net cash proceeds of $10.3 billion before tax and other transaction costs.
In a statement this morning, Tesco said that the completion of the disposal is expected to be completed during the second half of 2020.
It added that the move will 'further simplify the Tesco Group, enabling a stronger focus on driving cash generation' at its businesses in the UK and Ireland, as well as Central Europe.
"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 Dave Lewis, Tesco chief executive. "This sale releases material value and allows us to further simplify and focus the business, as well as to return significant value to shareholders."
Lewis thanked the group's colleagues in Thailand and Malaysia for their "professionalism and service", which he said has led to the creation of a strong business in the region.
"I am confident that the agreement we have reached with CP Group presents an exciting opportunity for their continued success."
The transaction is subject to anti-trust approval from Thai regulators.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.