Sime Darby is selling 30% of its stakes in Tesco Stores for RM300 million to Thailand's C.P Retail Development Company. The trading company is expecting an estimated net gain of RM270 million from the sale of its stake in Tesco Malaysia. The transaction is currently pending approval and expected to complete in the second half of 2020.
Jeffri Salim Davidson, group CEO of Sime Darby, said the deal provides Sime Darby with an opportunity to exit the non-core hypermarket business at a reasonable valuation, adding that it is part of its ongoing efforts to rationalise its non-core assets. Tesco began operations in Malaysia in 2002 under the name Tesco Malaysia, as part of a joint venture with Sime Darby. “We have come a long way with our joint-venture with Tesco. We opened our first store in Puchong in 2002. We have grown the business over the years and now have 69 stores nationwide," Davidson added.
According to a press release, this is part of a larger deal between Tesco and Charoen Pokphand Group that was signed in March 2020. Tesco then said it was selling its business in Malaysia and Thailand to Charoen Pokphand Group for US$10.6 billion to "further simplify and focus the business", according to chief executive Dave Lewis, as well as return to significant value to shareholders. This came after the group began reviewing its businesses in these two markets last December. The sale was said to help Tesco become "a significantly more focused business" as a renowned brand in the UK and Ireland, according to a press statement.
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