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Tesco to sell businesses in Thailand and Malaysia in $10.6 billion enterprise value

Christian Fernsby |
Tesco announces that it has entered into a conditional agreement with a combination of CP Group entities, namely C.P. Retail Development Company Limited, Charoen Pokphand Holding Co., Ltd, CP All Public Limited Company and C.P. Merchandising Co., Ltd with respect to the sale of Tesco’s businesses in Thailand and Malaysia, which is comprised of Tesco’s entire shareholding in Tesco Stores (Thailand) Limited, Tesco Stores (Malaysia) Sdn Bhd and any respective subsidiaries.

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The Disposal will simplify the Tesco Group, enabling a stronger focus on its retail businesses in the UK and Ireland and in Central Europe.

The Disposal also realises material value for Tesco’s shareholders and allows the Tesco Group to further de-risk the business by reducing indebtedness through a significant pension contribution of £2.5 billion.

The consideration payable to Tesco pursuant to the Disposal represents an enterprise value of $10.6 billion (equivalent to £8.2 billion) on a cash and debt free basis, representing an EV/EBITDA multiple of 12.5x 2 .

Under the terms of the Disposal, net cash proceeds are expected to be $10.3 billion (equivalent to £8.0 billion) before tax and other transaction costs.

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