Tesco is exiting Asia
Tesco decided to exit from the retail markets in Thailand and Malaysia and sell its units to Thai Group Charoen Pokphand for $10.3 billion, announced Bloomberg. Due to the impact of the coronavirus outbreak on global financial markets, Tesco shares have dropped 4.5% at the beginning of the week. Thailand and Malaysia were the retailers' third market in terms of value, generating $4.9 billion annually.
Tesco has more than 2,000 hypermarkets and convenience stores in Thailand under the Tesco Lotus brand. The chain was founded by CP Group in 1994 and later taken over by the British company. In Malaysia, Tesco has more than 70 shops, according to its annual report. Malaysian conglomerate Sime Darby Bhd owns a 30% stake in Tesco Malaysia. The deal will generate cash proceeds of GBP8 billion ($10.3 billion), according to a statement. About two-thirds of this amount will be returned as dividends for the shareholders and the rest will be used to eliminate its pension deficit.
The Asian business from Thailand and Malaysia was under strategic review since December last year. A similar procedure is currently underway at Tesco Poland.
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