Tesco exits US market with Fresh & Easy sale
U.K. retailer Tesco on Tuesday said following a strategic review, it has agreed to sell a substantive part of Fresh & Easy’s operating business to YFE Holdings, an affiliate of Yucaipa Companies.
As part of the restructuring process, Yucaipa will acquire more than 150 stores as well as Fresh & Easy’s Riverside distribution and production facilities. More than 4,000 employees will also transfer to the new business. As part of the deal, Tesco will loan the new business GBP 80 million (USD 126.6 million, EUR 95.1 million), secured against the Riverside Campus facility.
The stores not included in the transaction will be closed over the coming weeks. The total cash outflow relating to the closures, other expenses and the loan is expected to be no more than GBP 150 million (USD 273.4 million, EUR 178.3 million).
The sale to Yucaipa is expected to be complete within three months. Following the completion of the sale, there will be no financial exposure for Tesco.
“The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy’s stakeholders. It offers us an orderly and efficient exit from the U.S. market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy,” said Phillip Clarke, Tesco CEO.