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UK’s Tesco to quit Malaysia, Thailand

Tesco

Britain’s Tesco is weighing up its operations in Asia, as the UK’s largest supermarket retailer looks to exit Malaysia and Thailand.

SEE ALSO : Tesco to open 750 new stores in Thailand

According to multiple media reports, Tesco is considering the sale of its Malay and Thai operation, in a bid to home in on its UK domestic market, which continues to face challenges in light of Brexit.

The company confirmed it is undergoing a business review of operations and has received sale interest in its Asia operations, according to a statement.

“The evaluation of strategic options is at an early stage. No decisions concerning the future of Tesco Thailand or Malaysia have been taken. A further announcement will be made if and when appropriate,” Tesco said.

Analysts have pegged the sale value of the operations to sit between $US8.6 billion to $9.5 billion.

With an embattled domestic business, Tesco Asia has been a market of growth in recent quarters.

In the first half of fiscal 2020, Tesco Asia recorded $3.43 billion in revenues, accounting for about 8% of total sales.

According to Bloomberg, Tesco is the biggest hypermarket chain in Thailand, operating some 1,960 stores in total, with 74 stores in Malaysia. Tesco Thailand is estimated to be
valued at almost $7 billion, on account of real estate assets, Dow Jones reported.

Following the possible sales announcement, analysts predicted a slew of suitors could be in the running for the purchase. Japanese retail giant Aeon Co. could be interested in expanding its Malaysian empire, having acquired Carrefour’s operations in 2012 for $276 million.

SEE ALSO : Forever 21 filing for bankruptcy

Meanwhile, in Thailand, Central Group and the Singha Corp. are likely candidates, according to new wires. Tesco has left Japan, the U.S. and Turkey in recent years, as part of the company’s turnaround program.

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