Tesco, the UK-based multinational supermarket chain, has announced its intention to sell its business in Malaysia and Thailand to a conglomerate of Charoen Pokphand Group entities, in a deal valued at $10.6 billion.
According to sources, the decision has been taken to simplify the Tesco group, enabling a stronger focus on its retail business in the UK, Ireland and Central Europe where the supermarket chain has over 4,500 outlets ranging from convenience format to larger stores.
The company intends to return $6.6 billion to shareholders via a special dividend with associated share consolidation and reduce its debt by $3.26 billion, eliminating the current funding deficit.
Dave Lewis, chief executive of Tesco, 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”.
Completion of the deal now depends on Tesco shareholders’ approval and customary regulatory approvals in Thailand and Malaysia.
Sources: Tesco PLC / Reuters