Tesco sells its Asian stores in £8bn deal

UK retail giant Tesco has agreed to sell its operations in Thailand and Malaysia for ($10.6bn) £8bn.

The supermarket chain has 2,000 stores across both countries, under the Tesco Lotus brand, and is selling them to Thai conglomerate CP Group.

Chief executive Dave Lewis said the sale would allow Tesco "to further simplify and focus" its business.

He also said £5bn of the proceeds would be returned to shareholders via a special dividend.

Tesco revealed in December it had received interest for its Asian stores, which employ about 60,000 people, but did not reveal the bidders.

Tesco's only other overseas stores are in Ireland and in central Europe, including Poland and Hungary.

The retailer added that the sale would also slash debt and streamline the group, enabling a "stronger focus" on UK, Irish and central European activities.

The proposed sale was unanimously agreed by the Tesco board, but needs approval from shareholders and regulators. The deal is set to be finalised in the second half of this year.

The move comes as Mr Lewis prepares to step down this year, having overseen a major overhaul at Tesco during his five years in charge. He has cut thousands of jobs as part of a massive cost-cutting programme.

CP Group is Thailand's largest private company and one of the world's largest conglomerates, owning more than 10,000 Seven Eleven stores and one of Asia's largest telecommunications firms.

The group actually owned the stores - when they were known as Lotus - back in the late 1990s, but sold them to Tesco after losing money during the Asian financial crisis of 1997.