- Prachi Singh |
Tesco plc has decided to sell its businesses in Thailand and Malaysia to a combination of CP Group entities, namely C.P. Retail Development Company Limited, Charoen Pokphand Holding Co., Ltd, CP All Public Limited Company and C.P. Merchandising Co., Ltd (CP Group). The company said in a statement that consideration for the disposal represents an enterprise value of 10.6 billion dollars (equivalent to 8.2 billion pounds).
Commenting on the development, Dave Lewis, Chief Executive of Tesco, said in a statement: “Following inbound interest and a detailed strategic review of all options, we are announcing the proposed sale of Tesco Thailand and Tesco Malaysia. This sale releases material value and allows us to further simplify and focus the business, as well as to return significant value to shareholders.”
Following completion of the disposal, the company’s board intends to return 5 billion pounds to shareholders via a special dividend with associated share consolidation. The company added that this move will further de-risk the Tesco business by reducing indebtedness through a 2.5 billion pounds pension contribution and that, along with other measures, is expected to eliminate the current funding deficit and significantly reduce the prospect of having to make further pension deficit contributions in the future. The deal is expected to close during the second half of 2020.