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Tesco Asia sale to be settled before Christmas

FILE PHOTO: A shopping cart is pictured in a Tesco supermarket, amid the coronavirus disease (COVID-19) outbreak in Petaling Jaya, Malaysia June 12, 2020. REUTERS/ Lim Huey Teng

Britain’s biggest retailer Tesco expects to complete the $10.6 billion sale of its Asian businesses to CP Group on December 18, paving the way for a return of 5 billion pounds ($6.7 billion) to shareholders, it said on Wednesday.

Tesco agreed to sell its businesses in Thailand and Malaysia to CP Group in March.

It said that CP Group had now reviewed and was satisfied with the formal notice of approval from the Office of Trade Competition Commission in Thailand.

This, plus the approval received from the Ministry of Domestic Trade and Consumer Affairs in Malaysia on November 10, means there are no further conditions outstanding and the disposal is expected to complete on or around December 18.

“This sale allows us to focus on our businesses across Europe and to continue delivering for customers, make a significant contribution to our pension deficit and return value to shareholders,” said Tesco CEO Ken Murphy.

Tesco intends to return about 5 billion pounds of the net proceeds to shareholders via a special dividend, together with a share consolidation, and will also put 2.5 billion pounds into the Tesco PLC Pension Scheme shortly following completion.

The special dividend is expected to be paid around February 26, conditional on shareholder approval at a general meeting around February 11.

Last week, Tesco said it would pay back to government 585 million pounds of Covid-19 business rates relief, which prompted rivals to do the same.

Murphy said the decision to return the relief was “completely disconnected” to its plans to pay a special dividend once the Asian business was sold.

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