Wednesday 9 December 2020 7:55 am

Tesco to complete £8bn sale of Thai and Malaysian units this month

Tesco is set to complete the sale of its Thailand and Malaysia businesses later this month after all conditions for the deal were satisfied.

The UK supermarket giant announced in March that it was going to sell the two Asian businesses to Thai conglomerate CP Group. The deal is worth £8bn.

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Tesco is seeking to simplify and focus its business. It also plans to return £5bn to shareholders and ameliorate the pension deficit.

CP Group has reviewed and is satisfied with the formal notice of approval from Thailand’s Office of Trade Competition Commission, Tesco said.

The Malaysian Ministry of Domestic Trade and Consumer Affairs gave the green light on 10 November.

There are no further conditions outstanding. Tesco said it expects the deal to be completed on or around 18 December.

“I’m confident that the agreement with CP Group will ensure that they are well set up for continued success,” said Tesco chief executive Ken Murphy. 

“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.”

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Tesco said it will contribute £2.5bn to the supermarket’s pension scheme shortly after the deal is completed.

It will pay out the £5bn to shareholders in a special dividend. Tesco expects to pay the dividend on or around 26 February next year.