Britain’s biggest retailer Tesco expects to complete the $10.6 billion sale of its Asian businesses to CP Group on Dec 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 Nov 10, means there are no further conditions outstanding and the disposal is expected to complete on or around Dec 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 Feb 26 2021, conditional on shareholder approval at a general meeting around Feb 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.
Shares in Tesco were up 1.6% at 0808 GMT (3.08pm in Thailand).