Tesco has announced that it expects to complete the £8bn sale of its businesses in Thailand and Malaysia to the CP Group within days.
The deal, which includes over 2,000 stores, was struck back in March but was only cleared by local competition regulators last month. In a statement today, Tesco said that the CP Group had now reviewed and was satisfied with the formal notice of approval from the Office of Trade Competition Commission (OTCC) in Thailand.
This, combined with the recent approval received from the Ministry of Domestic Trade and Consumer Affairs in Malaysia, meant there are no further conditions outstanding and the disposal is expected to complete on or around 18 December.
Tesco confirmed that following the disposal, it intends to return around £5bn of the proceeds to its shareholders via a special dividend in February. The business will also reduce its indebtedness through a £2.5bn contribution to its pension scheme.
Tesco’s CEO Ken Murphy commented:
“I would like to thank all our colleagues in Asia for their hard work and dedication to our customers over many years. They have built a very strong business. I am confident that the agreement with CP Group will ensure that they are well setup for continued success. This sale allows us to focus on our businesses across Europe and to continue delivering for customers, make a significant contribution to our pension deficit and return value to shareholders.”
Under former boss Dave Lewis, Tesco has been retreating from overseas markets in recent years. The group is currently in the process of selling its operations in Poland to Denmark’s Salling Group, with the £181m deal expected to be wrapped in spring next year.
Performance of the group’s remaining operations in Central Europe (Czech Republic, Hungary and Slovakia) remain weak, although Murphy recently stated that he had no plans for further disposals of its international activities.
Sources: KamCity, Tesco, Reuters.
