On the go: Tesco will be making a one-off £2.5bn pension contribution from the sale of its businesses in Thailand and Malaysia that is expected to eliminate the current scheme deficit.
In a market update on Monday, the retailer said it had decided to sell Tesco Thailand and Tesco Malaysia to CP Group, following “interest received and a detailed strategic review”.
The deal is expected to result in net cash proceeds of $10.3bn (£7.9bn) before tax and other transaction costs.
Following the completion of the sale, £5bn will be returned to shareholders via a special dividend with associated share consolidation.
The retailer will also make a £2.5bn pension contribution to the Tesco Pension Fund that, alongside other measures, is “expected to eliminate the current funding deficit and significantly reduce the prospect of having to make further pension deficit contributions in the future”, it stated.
At the last actuarial valuation, finished on March 2017, the scheme had a £3bn deficit, while annual contributions of £285m are planned to run until 2027.
