Tesco to sell operations in Thailand and Malaysia for £8.2bn

Tesco has agreed a deal to sell its supermarket arms in Thailand and Malaysia, in a move worth around £8.2 billion.

It said it will receive around £8 billion in cash proceeds and plans to hand £5 billion of this to shareholders in a one-off dividend.

Tesco has agreed to sell the south-east Asian business to CP Group, Thailand’s biggest conglomerate presided over by Dhanin Chearavanont, the country’s second richest man.

In December, the supermarket confirmed 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 company 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, 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 3,769 stores, as well as its Eastern European operations, where it has 895 sites.

Chief executive Dave Lewis said: “Following inbound interest and a detailed strategic review of all options, we are announcing today 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.

“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.”