UK retailer Tesco Plc (LON:TSCO) said it had agreed to sell US grocery arm Fresh & Easy Neighborhood Market Inc to YFE Holdings Inc, part of investment firm Yucaipa Companies LLC, in a move to exit the US market.
The sale covers over 150 stores as well as Fresh & Easy’s Riverside distribution and production facilities and includes over 4,000 staff, with stores excluded from the deal to be shut down in the next weeks, Tesco said.
The offload, reflecting the UK firm’s focus on markets with considerable growth potential, is seen to be finalised within three months, pending legal and regulatory clearances.
As part of the transaction, Tesco will be issued warrants for up to a 32.5% stake in YFE Holdings Inc.
The UK company will also extend a loan of some GBP80m (USD125.8m/EUR94.9m) to the new business, covered by the Riverside Campus facility, it said.
The assets included in the sale had a gross value of GBP229.3m as of 23 February 2013 and generated net losses before tax of GBP163.4m in the year to that date