By P.R. Venkat 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 9, 2019).

U.K.--based retailer Tesco PLC is considering selling its supermarket businesses in Thailand and Malaysia, in deals that could value those operations at up to $9 billion, people with knowledge of the plans said.

Tesco, one of the world's largest grocers, is potentially working with an adviser for a sale of the assets, the people said. One of the people said that Tesco could start a sale process early next year.

However, the plans are at a preliminary stage, and a deal might not materialize, the people warned.

Tesco said in a statement that it confirmed that, following inbound interest, it had 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. A further announcement will be made if and when appropriate," the statement said.

Tesco, like some counterparts, has been shrinking abroad to focus on its home market, where it is combating discount grocers and online competitors such as Amazon.com Inc. Since 2011 it has exited markets including Japan, the U.S. and South Korea, and has ceded some control of its operations in China.

For the six months to Aug. 24, Tesco's pretax profit was GBP494 million (US$649 million), compared with GBP463 million a year earlier.

Tesco's recent divestments are in line with its peers such as Carrefour SA, and Groupe Casino SA of France, which also in recent years have exited operations in countries such as Indonesia, Thailand and Vietnam.

Tesco entered the Thai market in 1998 by buying a majority stake in Lotus Supercenter, a hypermarket concern, for $365 million from Thai conglomerate Charoen Pokphand Group. Tesco Lotus now operates around 2,000 branches of stores including hypermarkets in Thailand.

People with knowledge of the process said the Thai business could be valued at nearly $7 billion as it includes real-estate assets.

Tesco has operated in Malaysia since 2006 and now has 74 stores there. A person with knowledge of the process said the Malaysian business could be valued at $1.5 billion to $2.0 billion.

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

 

(END) Dow Jones Newswires

December 09, 2019 02:47 ET (07:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
Tesco (LSE:TSCO)
Gráfico Histórico do Ativo
De Fev 2024 até Mar 2024 Click aqui para mais gráficos Tesco.
Tesco (LSE:TSCO)
Gráfico Histórico do Ativo
De Mar 2023 até Mar 2024 Click aqui para mais gráficos Tesco.