Tesco Lotus set to return to Thai conglomerate CP Group’s stable in $10.6b deal

A Tesco store sign is displayed. Photo: Simone Hutsch/unsplash

CP Group has offered to acquire Tesco Asia Group’s Malaysian and Thai operations in a deal valued at $10.58 billion on a cash and debt-free basis, the Thai conglomerate said in a filing to the Stock Exchange of Thailand Monday.

The Thai company said the acquisition was complementary to its Thailand retail business, offering a wider range of outlets, including wholesale options and hypermarket, supermarket and convenience store formats. The deal would also offer an entry into Malaysia’s major retail markets, CP Group said.

CP Group said it would fund the deal with cash flow from group companies and loans.

The first Lotus hypermarket was opened by CP Group in Thailand in 1994, and the British supermarket chain Tesco entered the business in 1998. CP Group had largely exited the business by 2003.

Under the deal, the Thai company said it will acquire 86.9 per cent of Tesco Thailand and 70 per cent of Tesco Malaysia from U.K.-based supermarket chain Tesco Holdings.

In addition, CP All will acquire 30 percent of Tesco Malaysia from Sime Darby Allied Products, the statement said. The deal to acquire the 70 per cent Tesco Malaysia stake is conditional on the Sime Darby AP acquisition’s completion, the statement said.

The deal, which is subject to approvals from shareholders of U.K. supermarket chain Tesco and from the Thai and Malaysian governments, is expected to be completed in the first half of this year, the filing said.

“Given the fact that Tesco Asia has been enjoying the strong operating results consistently, coupled with its highly experienced management and operating teams capable of adapting to changing business and market environment, CPF firmly believes that this investment with Tesco Asia will further enhance the already impressive operating results,” CP Group said in a press release.

CP Group, controlled by Dhanin Chearavanont, has beaten out competing bids from the Chirathivat family’s Central Group, and tycoon Charoen Sirivadhanabhakdi’s TCC Group, according to a Reuters report.

Tesco Holdings currently owns 86.9 percent of Tesco Stores (Thailand) and 70 percent of Tesco Stores (Malaysia), while Sime Darby Allied Products holds 30 percent of Tesco Stores (Malaysia).

In Thailand, Tesco operates 214 hypermarkets under the Tesco Lotus brand, 179 Talad Lotus stores and 1,574 Tesco Express stores. Tesco Malaysia operates 46 Tesco hypermarkets, 13 supermarkets and nine convenience stores.

Tesco has previously said the sale was aimed at eliminating its pension debt, and at providing much need support to its struggling U.K. business, according to a Bloomberg report.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.