UK supermarket brand Tesco said it has sold its retail businesses in Thailand and Malaysia for $10.8bn (£8.3bn).
The retail giant sold the operations to a combination of CP Group entities, namely C.P. Retail Development Company Limited, Charoen Pokphand Holding Co. Ltd, CP All Public Limited Company and C.P. Merchandising Co. Ltd.
The FTSE 100-listed retailer said the cash sale was reached following inbound interest received and a detailed strategic review.
Following completion of the disposal, the firm’s Board intends to return around £5.0 billion to shareholders. It said this would be done via a special dividend with associated share consolidation.
The retailer will also make a £2.5 billion pension contribution with the proceeds from the sale.
The disposal was unanimously agreed by Tesco Board to be in the best interests of all stakeholders. It’s expected to be completed in the second half of 2020.
The firm said the sale will allow it a stronger focus on driving cash generation and returns to shareholders from its 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.”
With the stock market in major plunges from the coronavirus outbreak, Tesco’s shares were 2.8% lower at £2.33 on Monday.