Sime Darby looking to exit Tesco business in Malaysia

Sime Darby Bhd is looking to exit its non-core businesses including hypermarket chain Tesco in Malaysia.

Malaysian automotive-to-healthcare conglomerate Sime Darby, which reported a 11% decline in its fiscal second quarter net profit, is looking to sell its entire 30% stake in hypermarket chain Tesco Malaysia, its chief executive said.

“There is an on-going sale process right now, orchestrated by Tesco PLC to sell Malaysia and Thailand business,” Jeffri Salim Davidson said at a news conference. “Our 30% stake in Tesco is not core to Sime Darby. In the long run, we would exit the business. There has been some bids from Thai tycoon, who are looking to acquire Tesco Plc’s stake in the supermarket chain in Malaysia and Thailand.”

In December 2019, Tesco PLC following a strategic review, announced its plan to sell businesses in Thailand and Malaysia, potentially valuing them at $9 billion. But the company stressed that the initiative may not lead to a transaction.

Separately, Sime Darby’s chief strategy officer said that the company will continue to sell non-core assets and is currently in advanced talks to sell five such businesses. “We have a list of assets, buildings, land minority stake that we classified as non-core,” Thomas Leong told Nikkei Markets on the sidelines of the earnings conference. “In our overall strategy, one pillar is to rationalize the non-core business, including the E&O.” Although, non-core divestment is an active process, the company is not in a rush, and will wait for optimum price, he added.

Be the first to comment

Leave a Reply

Your email address will not be published.