Tesco will end a six year attempt to crack the US by lending billionaire Ron Burkle‘s Yucaipa investment company £80m to take the loss-making Fresh & Easy stores off its hands.
Los Angeles based company, Yucaipa, will acquire over 150 Fresh & Easy stores, its distribution and production facilities and 4,000 Fresh & Easy employees will transfer to the new business.
Tesco announced they would be pulling out of the US in April after incurring losses of £1bn. The deal will further decrease the world‘s third largest retailer international portfolio following its Japan pullout in 2012. Last month it said it would be entering a Chinese merger with firm CRE.
“The decision we are announcing represents the best outcome for Tesco shareholders and Fresh & Easy‘s stakeholders. It offers us an orderly and efficient exit from the U.S. market,” said Tesco Chief Executive Philip Clarke.
The deal ensures that Tesco will avoid having to close all 150 Fresh & Easy stores and lay off its entire workforce of 5,000.