SIME Darby Bhd (SDB) is divesting its entire 30% stake in Tesco Stores (Malaysia) Sdn Bhd for RM300 million, in line with its rationalisation exercise for non-core assets.

Its wholly owned subsidiaries, Sime Darby Allied Products Bhd and Sime Darby Holdings Bhd, today inked conditional agreements with CP Retail Development Company Ltd, Tesco Holdings BV and Tesco PLC for the disposal.

In a statement, SDB said the disposal is part of a larger deal signed last month between Tesco PLC and Thailand’s CP Group (CP) to sell Tesco PLC’s businesses in Thailand and Malaysia to CP for an enterprise value of US$10.6 billion (RM46.3 billion).

SDB is expected to record an estimated net gain on disposal of RM270 million from the sale of the stake, which it has held since 2001.

It said the transaction, conditional on the approval of the Domestic Trade and Consumer Affairs Ministry, is expected to be completed in the second half of the year.

Group CEO Jeffri Salim Davidson said the deal provides the company with an opportunity to exit the non-core hypermarket business at a reasonable valuation.

“We have come a long way with our joint venture with Tesco since we opened our first store in Puchong in 2002. We have grown the business over the years, and now have 69 stores nationwide.

“This transaction is part of our ongoing effort to rationalise our non-core assets.” – Bernama, April 22, 2020.