Tesco has continued to simplify its operations by completing its exit from China. The group has sold its 20% share in Gain Land to its joint venture partner China Resources Holdings (CRH) for £275m.
Having struggled to make an impact in the Chinese market, Tesco established the Gain Land JV with CRH in 2014, combining its 130 stores in the country with its partner’s almost 3,000.
Tesco stated that the sale allows it to “further simplify and focus” the business on its core operations, adding that the proceeds will be used for general corporate purposes.
The move comes after Tesco revealed in December last year that it may sell its Asia unit, which operates nearly 2,000 stores in Thailand and 74 in Malaysia. Recent reports said that the business attracted offers from three major Thai conglomerates in the first round of bidding on a deal that could be worth up to $10bn (£7.7bn).
A sale would provide a significant cash boost for Tesco, which could be used to improve its operations in the UK and combat the rise of the discounters.
The exit from Asia could be one of the last acts of Tesco’s CEO Dave Lewis. He is due to be succeeded by former Walgreens Boots Alliance executive Ken Murphy at the start of October.
