Sime Darby selling Tesco stake to Thailand’s CP Retail for RM300m

Tesco outlet in Tanjung Tokong, Malaysia

KUALA LUMPUR: Sime Darby Bhd is selling its 30% stake in Tesco Stores (Malaysia) Sdn Bhd to Thailand's C.P. Retail Development Company Ltd for RM300mil.

It said on Wednesday its units Sime Darby Allied Products Bhd and Sime Darby Holdings Bhd had entered into conditional agreements with C.P. Retail Development Company Limited, Tesco Holdings B.V. and Tesco PLC to divest its 30% stake in Tesco.

“The disposal is part of a larger deal between Tesco PLC and Thailand’s C.P. Group (CP) signed in March 2020, to sell Tesco PLC’s businesses in Thailand and Malaysia to CP for an enterprise value of US$10.60bil.

“Sime Darby expects an estimated net gain on disposal of RM270mil from the sale of its stake in Tesco Malaysia, a joint venture it has held since 2001, ” it said.

SDB group CEO Datuk Jeffri Salim Davidson said: “We have come a long way with our joint-venture with Tesco. We opened our first store in Puchong in 2002. We have grown the business over the years and now have 69 stores nationwide.”

“This deal provides SDB with an opportunity to exit the non-core hypermarket business at a reasonable valuation. This transaction is part of our ongoing efforts to rationalise our non-core assets.”

This transaction is conditional upon the approval of the Malaysian Ministry of Domestic Trade and Consumer Affairs, the sale of Tesco BV’s shares in Tesco Malaysia and the sale of Tesco’s Thai business to CP.

“The proposed disposal is expected to complete in 2H 2020, ” it said.