UK retailer Tesco is to pull out of south-east Asia, having agreed the sale of its operations to Thai conglomerate Charoen Pokphand for US$10.6 billion. This represents a major reversal of its strategy of international expansion.
In a statement, Tesco’s 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.”
Tesco’s sale of its nearly 2,000 stores in Thailand and 74 in Malaysia constitutes the final stage of its exit strategy from Asia, having sold its South Korean HomePlus business in 2015. In February, Tesco announced its plans to sell its 20 per cent stake in Gain Land to China Resources, to end its activities in China.
Charoen Pokphand outbid two rival Sino-Thai conglomerates, Central Group and TCC Group. Central Group’s offer was just over US$9bn, according to people close to the deal, and TCC recently raised a $10 billion loan to finance its bid, according to Bloomberg.