Tesco has agreed the sale of its businesses in Thailand and Malaysia to a combination of CP Group entities, namely C.P. Retail Development Company Limited, Charoen Pokphand Holding, CP All Public Limited Company and C.P. Merchandising for €9.4bn (£8.2bn). Following the completion of the disposal, the Board intends to return c.€5.7bn (£5bn) to shareholders via a special dividend with associated share consolidation. The Disposal will further de-risk the Tesco business by reducing indebtedness through a €2.86bn (£2.5bn) 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 deal will further simplify the Tesco Group, enabling a stronger focus on driving cash generation and returns to shareholders from our retail businesses in the UK and Ireland and in Central Europe.
Dave Lewis, Chief Executive of Tesco, 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."