Tesco to sell its Malaysian and Thai businesses following a bid from a unanimous buyer

British
multinational groceries and general merchandise retailer, Tesco, had started a
recovery plan following an accounting
scandal in 2014. As part of the plan, the supermarket chain had started to
pull out of the international markets. Extending on its recovery plan, Tesco
announced in a statement on Sunday that it is considering selling the Malaysian
and Thai segments of its business. Pulling out of these two markets, Central
Europe and Ireland will remain the only two locations outside of the United
Kingdom where the supermarket chain will be operational.  

Tesco
Operates 74 Stores In Malaysia And 1,967 In Thailand

While
the company highlighted that it has started to thoroughly evaluate its
businesses in Thailand and Malaysia, Tesco’s representative refused to divulge
the name of the buyer at this stage. As per the announcement, Tesco currently
operates 74 stores in Malaysia and another 1,967 stores in Thailand. According
to an estimate, the stores in the two locations employ a total of around 60,000
people.

In
the fiscal year ending in February, Tesco’s Malaysian and Thai businesses
recorded 4.9 billion pounds in combined revenue with a profit of 286 million
pounds in total. Following the 2014’s scandal, Tesco’s Chief Executive, Dave
Lewis, had sold the South Korean Business to enhance support for the balance
sheet. As per the report in 2015, Tesco had earned 4 billion pounds out of this
sale.

CEO
Dave Lewis Plans On Leaving The Supermarket Chain In The Upcoming Summer

Lewis
had announced earlier this year that he
intends to depart from the business in the upcoming summer. He had further
added that Tesco’s asset sales can now be expected to have come to an end. As
per the sources, however, the supermarket chain is again considering the bids
to sell its Thai and Malaysian segments of its business.

Tesco
declared in its recent statement:

“Tesco
confirms that, following, inbound interest, it has commenced a review of the
strategic options for its businesses in Thailand and Malaysia, including an
evaluation of a possible sale of these businesses. The evaluation of strategic
options is at an early stage, no decisions concerning the future of Tesco
Thailand or Malaysia have been taken and there can be no assurance that any
transaction will be concluded”.

With
a market cap of 22.75 billion, Tesco has performed well in the stock market in
2019. Having started the year at 191 GBX, the supermarket chain printed a
year-to-date high of 253 GBX in April. The stock is currently exchanging hands
at around 232 GBX. Share prices have remained above the opening level in 2019
so far.