// Tesco Thailand & Tesco Malaysia to be sold off for £8.2 billion
// The sale was agreed with CP Group, Thailand’s biggest conglomerate presided over by Dhanin Chearavanont
// The exit from Thailand and Malaysia follows Tesco’s exit from China
Tesco has agreed a deal to sell its supermarket arms in Thailand and Malaysia, in a move worth around £8.2 billion.
The Big 4 grocer said the deal would see it receive around £8 billion in cash proceeds, of which £5 billion would be handed to shareholders in a one-off dividend.
The remaining amount from the cash proceeds is expected to be used to top up Tesco’s pension deficit.
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Tesco agreed to sell its South East Asian business to CP Group, Thailand’s biggest conglomerate presided over by Dhanin Chearavanont, the country’s second richest man.
The news comes after grocery giant confirmed in December that it was considering a sale of its Asian operations as part of a strategic review and had been approached by a potential buyer.
Last month, Tesco also exited China after selling its stake in the Gain Land joint venture for £275 million.
The supermarket chain said it received multiple offers for the Asian division and believes the disposal “will realise a significantly higher value than could be generated from Tesco’s continued ownership and investment”.
Tesco said the deal for its South East Asian division, which is expected to complete in the second quarter of 2020, will “further simplify” the business and leave it only with operations in Europe.
It said it will now focus on operations in the UK and Ireland, where it has 3769 stores, as well as its Eastern European operations, where it has 895 stores.
“Following inbound interest and a detailed strategic review of all options, we are announcing today the proposed sale of Tesco Thailand and Tesco Malaysia,” chief executive Dave Lewis said.
“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.”
with PA Wires
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