Tesco Finalizes China Exit With $357 Million Sale
LONDON, ENGLAND - Tesco, one of Britain’s biggest retailers, teased the idea of leaving the Asia market back in December. After much deliberation, the company has completed its exit from China with a £275 million deal (around $357 million USD). The joint venture was sold to state-run partner China Resources Holdings (CRH).
Reuters reported the deal is scheduled to complete on February 28. The deal allows Tesco to further simplify and focus the business on core operations, the news site continued, adding that the proceeds will be used for general corporate purposes.
Talks are still in the air concerning operations in Thailand and Malaysia. The Asian exit could be one of the last acts of Tesco CEO Dave Lewis, who will be succeeded by Ken Murphy in October.
Bernstein Analyst Bruno Monteyne expects Tesco to start a 1 billion pound share buyback program in its 2020-21 financial year. “With this transaction and the possible sale of Thailand and Malaysia, Tesco’s biggest short-term concern could be how to efficiently return cash to shareholders,” he said.
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