Tesco shares soared to the peak after the announcement of the Asian business’ sale

Analysts estimate British retailer chains in Thailand and Malaysia at $9 billion.

Tesco shares jumped nearly 6% at one point on Monday, December 9, after the largest British retailer announced the selling Asian companies’ possibility in Thailand and Malaysia. Reuters writes that analysts estimate companies at $ 9 billion. This direction brings about 8% supermarket annual incomes and 10% its profit.

Tesco has about 2,000 stores in Thailand and 74 in Malaysia. For six months of this year, until August 24, sales grew of 2.56 billion pounds ($ 3.37 billion), by increasing on 1% over the same period last year. Operating profit amounted to 171 million pounds ($ 225 million), by increasing of 42.3%.

Analyst of Bernstein Bruno Montain noted that Tesco’s Thai business is “high-quality business.” 50% of its income comes from the shopping centers’ rental, and 50% – from the food retail market, which is much less competitive than in the UK. He said that Thai businesses still have opportunities for organic growth.

In 2015, Tesco sold its South Korean subsidiary to the group led by private equity firm MBK Partners for $ 6.1 billion. A year later, it sold its business in Turkey. Tesco has already made expensive exits from markets of Japan, the USA and China, abandoning its once high global ambitions.

If Tesco leaves Thailand and Malaysia, this will inevitably raise questions about the future of its remaining foreign chains – a loss-making Central European subsidiary consisting of stores in the Czech Republic, Hungary, Poland and Slovakia.

Recall, the Head of Tesco Dave Lewis announced that he will leave his post next year, as he successfully completed his tasks for business’ restructuring.

As it is known, 4,500 workers of the largest British retail chain can be fired. The work’ process will be simplified and administrative tasks will be reduced in all 153 Tesco Metro stores. A large store was designed for weekly shopping, but 70% shoppers use it as a minimarket.

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Tesco plans to close 10% of its stores and lay off 4,500 employees