Tesco in Thailand

Britain’s biggest retailer Tesco said Monday that it has agreed to sell its businesses in Thailand and Malaysia to Thai conglomerate CP Group for £8.0 billion ($10.4 billion, 9.2 billion euros).

“Following inbound interest and a detailed strategic review of all options, we are announcing today the proposed sale of Tesco Thailand and Tesco Malaysia,” said outgoing Chief Executive Dave Lewis in a statement.

He said the supermarket chain would return £5.0 billion of the proceeds to investors.

“This sale releases material value and allows us to further simplify and focus the business, as well as to return significant value to shareholders.”

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Tesco added that the divestment will also slash debt and streamline the group, enabling a “stronger focus” on UK, Irish and central European activities.

“The disposal will further de-risk the Tesco business by reducing indebtedness through a £2.5-billion pension contribution 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 retailer said.

The move was unanimously agreed by the Tesco board, but remains conditional on shareholder and regulatory approvals. The deal is set to complete in the second half of this year.

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The announcement comes as Dave Lewis prepares to step down in 2020, having overseen a major overhaul at Tesco during his five years at the helm, axing thousands of jobs as part of a massive cost-cutting programme.

Lewis is leaving for personal reasons and will be replaced by Walgreens Boots Alliance executive Ken Murphy.