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Tesco To Sell Fresh & Easy Chain
Posted On: 13-09-2013 00:00:00 13

British supermarket chain Tesco Plc has agreed to sell most of its loss-making Fresh & Easy chain in the U.S. to billionaire Ron Burkle's Yucaipa Companies LLC. The deal marks Tesco's exit from the U.S. market after a period of six years. Under the deal Yucaipa's affiliate YFE Holdings Inc. will acquire more than 150 Fresh & Easy stores as well as its Riverside distribution and production facilities in California.

As per the agreement, 4,000 employees of Fresh & Easy will transfer to the new business. The transaction is expected to be completed within three months. As part of the deal, Tesco will provide a loan of 80 million pounds to Yucaipa, which will be secured against the Riverside Campus facility. The total cash outflow relating to the closure of the stores, other expenses and the loan is expected to be no more than 150 million pounds.

The stores not included in the transaction will be closed over the coming weeks. Following the completion of the full sale and disposal process, there will be no continuing financial exposure for Tesco.

Tesco noted that the sale of Fresh & Easy stores is in line with the company's focus on the disciplined allocation of capital to markets with significant growth potential and the opportunity to deliver strong returns. The company had identified that the Fresh & Easy business would not deliver acceptable shareholder returns on an appropriate time frame in its current form.

 
 
 

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