Tesco sells businesses in Thailand and Malaysia
Supermarket giant Tesco has agreed to sell its businesses in Thailand and Malaysia to CP Group for £8 billion.
The move follows a strategic review.
Once the disposal is completed, Tesco plans to return around £5 billion to shareholders via a special dividend with associated share consolidation.
In a statement, Tesco said the deal will further de-risk its business by reducing indebtedness through a £2.5 billion pension contribution that is expected to eliminate the current funding deficit. It will also reduce the prospect of having to make further pension deficit contributions in the future.
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. 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.”
The disposal is expected to complete in the second half of 2020.