By P.R. Venkat 
 

U.K.-based retailer Tesco has agreed to sell its Asia assets to one of Thailand's richest conglomerates for an enterprise value of $10.58 billion.

The company has agreed to sell the Asia business to CP Group entities that include C.P. Retail Development Co., Charoen Pokphand Holding Co. and CP All Public Ltd., Tesco said in a statement Monday.

Tesco, one of the world's largest grocers, had said in December that it had started reviewing options for its businesses in Thailand and Malaysia, including possible sales.

Like some of its counterparts, Tesco has been shrinking its presence abroad to focus on its home market, where it is locked in a price battle with discount grocers and online competitors such as Amazon.com Inc. and Ocado Group PLC.

Tesco said Monday that the sale will give it net cash proceeds of $10.3 billion before tax and other transaction costs.

Following completion of the disposal, the board intends to return 5.0 billion pounds ($6.52 billion) to shareholders via a special dividend with associated share consolidation, the company said.

Tesco said the sale will further de-risk its business by reducing indebtedness through a GBP2.5 billion pension contribution, alongside other measures.

CP Group is owned by tycoon Dhanin Chearavanont, who in recent years spent billions of dollars in acquiring assets spanning from retail to insurance.

 

Write to P.R. Venkat at venkat.pr@wsj.com

 

(END) Dow Jones Newswires

March 09, 2020 03:31 ET (07:31 GMT)

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