March 12, 2020
Charoen Pokphand Foods to acquire 20% stake in Tesco Asia Group
Charoen Pokphand Foods Public Co. Ltd. (CPF) of Thailand, through its wholly owned subsidiary C.P. Merchandising Co. Ltd. (CPM), has resolved to acquire shares or economic interest of up to 20% of total issued shares in Tesco Asia Group, a leading retailer under Tesco Lotus brand in Thailand and Malaysia.
Mr. Prasit Boondoungprasert, chief executive officer, said that CPF's investment in Tesco Asia is aimed at further strengthening its value chain in terms of distribution channels in Thailand and Malaysia and enhancing the range of consumer options in this space.
CPF plans to modernise its distribution channels of meat products to better suit consumers' behaviour. CPF said it is confident that the investment presents exciting opportunities for enhancing Thai and Malaysian consumer experiences in an already highly competitive sector.
This joint investment is expected to boost sales of both Tesco and CPF. "Given the fact that Tesco Asia has been enjoying the strong operating results consistently, coupled with its highly experienced management and operating teams capable of adapting to changing business and market environment, CPF firmly believe that this investment with Tesco Asia will further enhance the already impressive operating results". CPF said.
The investment is subject to several conditions including obtaining the approval by shareholders of Tesco UK, as well as the approvals of the Thai Trade Competition Commission and of the Ministry of Domestic Trade and Consumers Affairs of Malaysia.
The transaction is expected to be concluded by the end of 2020.