Sime Darby Bhd (SDB) disposes its entire 30 percent stake in Tesco Stores (M) Sdn Bhd for RM300 million as part of its ongoing efforts to rationalise its non-core assets.
Our wholly-owned subsidiaries, Sime Darby Allied Products Bhd and Sime Darby Holdings Bhd, signed the conditional agreements with CP Retail Development Company Ltd, as well as Tesco Holdings BV and Tesco PLC, SDB said in a statement.
SDB said the disposal is part of a larger deal between Tesco PLC and Thailand’s CP Group (CP), which was signed in March, to sell Tesco’s businesses in Thailand and Malaysia to CP for an enterprise value of USD10.6 billion.
The deal is estimated to provide Sime Darby with a net disposal gain of RM270 million which it held since November 2001.
Sime Darby group chief executive officer Datuk Jeffri Salim Davidson, said, “We have come a long way with our joint-venture with Tesco since we opened our first store in Puchong in 2002. Our business have grown the business over the years and now have 69 stores nationwide.”
“The deal will provide the company with an opportunity to exit the non-core hypermarket business at a reasonable valuation,” he added.
Yet, the proposed disposal is conditional upon the approval of the Malaysian Ministry of Domestic Trade and Consumer Affairs, which is expected to be completed in the second half of this year.